Commodities have jumped, Treasury yields have fallen and the dollar is under broad pressure following the CPI report.
The price action is a bit tough to square with the data. The numbers were broadly in-line with the consensus, if not a touch on the hot side.
This looks like 1) A market that was too long USD 2) Some sensing we're near peak CPI.
The subtext from Powell this week was that he isn't freaking out about inflation. He still thinks it will subside with omicron and when manufacturers catch up. The 37% y/y rise in used car prices is certainly going to unwind at some point so there's a basis for what he believes.
The strength of this move is stark though and strange.
Cable continues to positively sizzle. It rose to 1.3680 from 1.3645. It's up more than 5 full cents since the triple bottom at 1.3180 in mid-December.
The 200-day moving average in cable is at 1.3735 and is the next level to watch.
