- A fake CPI 'leak' is doing the rounds and might be impacting markets
- BOE's Bailey: Options other than 25 bps hikes are on the table
- Fed's Barkin: Expects inflation to come down but not immediately or predictably
- More from Barkin: Says he would take 'seriously' a negative GDP reading
- Fed's Barkin: Concerned taht post-pandemic changes will make inflation more difficult
- US treasury auctions off $33 billion of 10 year notes at 2.96%
- White House memo: US economic data not consistent with recession in 1st or 2nd quarter
- US IBD/TIPP economic optimism 38.5 vs 38.1 prior
Markets:
- Gold down $9 to $1724
- US 10-year yields down 2 bps to 2.97%
- WTI crude oil down $8.36 to $95.73
- S&P 500 down 36 points to 3818
- JPY leads, CAD lags
The big headline in Europe was the euro briefly falling below parity with the US dollar, touching 0.9999. It then bounced to 1.0073 before settling back to 1.0034 last. The pair touching the big figure appeared to be a signal for dollar bulls to take a bit off the table.
In concert, the dollar fell against the yen, pound and euro. Even the commodity currencies got in on the action, something that extended as US equities pared losses in the premarket and then began to rally after the open.
Late in the day those moves began to fade. That may have been apprehension about the US CPI report or it may have been an obviously fake 'leak' of the US CPI report. In any case, risk assets fell and that put a fresh bid into the US dollar.
The other notable move in markets was in crude. It was down around $3 when US traders arrived but that extended to $8, making it one of the largest nominal drops ever. There was no clear catalyst for the big drop in oil with many pointing to China lockdowns and recession fears as reasons.
Whatever it was, the Canadian dollar wasn't particularly bothered. Perhaps that's because the US CPI and Bank of Canada decisions on Wednesday have made traders reluctant to shift positions. We should get some clarity in the day ahead.
