in May as new orders slowed, pushing a measure of prices paid by businesses for inputs to a three-year low, which could aid the Federal Reserve's fight against inflation."The index sends another signal that demand is cooling and that the cumulative tightening is working through the economy, giving room to the Fed to pause in June to assess conditions further," said Saxo Markets strategists in a note to clients.
Markets are now pricing in a 77% chance of the Fed standing still, a sharp jump from a 36% chance a week earlier, according to CME FedWatch tool. In oil markets, prices eased to give up most the gains from the previous session after the world's top exporter, Saudi Arabia, said that it would further cut output. U.S. crude fell 0.25% to $71.97 per barrel and Brent was at $76.55, down 0.21% on the day.