All in regards to the post-CPI digestions within the session forward

The dollar is down against the yen but keeping relatively steadier against the rest of the major currencies bloc, well at least for now. Treasury yields continue to look heavy and that will be a spot to watch in gauging dollar sentiment for the remainder of the week. USD/JPY is down 0.6% currently to 153.95, after running down from a break below 155.00 overnight.

With little on the agenda in Europe, it’s all about the post-CPI digestions in the session ahead. Risk trades soared in the aftermath with fresh record high closes in US major indices. The S&P 500 cracked 5,300 for the first time and closed above that. US futures are little changed for now but the optimism is still holding for the most part.

That being said, everyone expects a continuation of the price action from yesterday. So, is it really going to be that straightforward? We’ve moved in to price two full 25 bps rate cuts for the Fed now. Is there room to push that even further just off the latest data? It’s a tight argument especially if the June and July meetings are ruled out.

I’d keep a close watch on the bond market just in case of any turnaround signs. But it’s tough to fight the technicals elsewhere for the time being.

0800 GMT – Italy April final CPI figures

That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.