US inflation information in focus however will Trump tariffs steal the thunder?

US data is back on the agenda today and it doesn’t get bigger than the CPI report. The Fed is in pause mode due to uncertainty surrounding Trump’s policies. But any higher readings on price pressures will only add to the conundrum for the central bank in trying to hold out for a bit before resuming rate cuts.

As things stand, traders are only pricing in ~35 bps of rate cuts for the year. And the first rate cut is only primed for September, pushed back from July previously. That comes after all the theatrics that Trump has pulled in the past two weeks.

While the inflation data is a key focus for markets today, it might not be the most impactful at the end of it all.

Trump had previously said he will announce reciprocal tariffs either on Tuesday or Wednesday. He didn’t do so yesterday, so expect traders and investors to be watching carefully for anything later today. When asked earlier, he just said “we’ll see”.

It seems like his aides are trying their best to iron out the kinks to push the tariffs through without the need for Congressional approval. We’ll have to see how and if they manage that. The announcement might not come today but it still could later in the week. So, just keep your eyes and ears peeled.

But in the meantime, I reckon silence might be golden for risk sentiment in general. See no evil, hear no evil, speak no evil.

Until Trump really delivers on reciprocal tariffs, the longer the announcement gets delayed should invite dip buyers to slowly test the waters. It wouldn’t be the first time we get this sort of quick switch to greed. But again, that also invites complacency to when Trump really drops the bomb.

For now though, it’s a bit of a mixed bag out there. Treasuries are offered with yields running higher again but the dollar struggled a fair bit yesterday, especially against the euro and pound. USD/JPY remains an exception as it is poised for a third straight day of gains this week, up another 0.8% to 153.65 at the moment. A crucial point for the pair is that it is moving back up above its key daily moving averages of 152.70-87 now. Buyers back in control?

Meanwhile, gold is seeing its surging rally run out of steam for a bit as it falls back to $2,884 currently. The 100-hour moving average at $2,882 and 200-hour moving average at $2,850 will be key near-term levels to watch in holding the line for gold.

As for stocks, there was a mixed showing yesterday with tech shares lagging in Wall Street. But so far amid all the tariff threats, you’d hardly notice any real hiccups on the charts for equities. And I think that says a lot about the state of play and underlying sentiment in the market.