Well, I can safely say that markets were rather hoping for a bigger surprise – whichever way – from the US CPI data yesterday. The end result was a bit of a snoozefest as it doesn’t add or take away much from the prevailing outlook, as discussed here.
There was a retreat in bond yields at least, which saw USD/JPY fall off from 135.00 to 134.25 at the moment. The low from last week at 133.50 is one to watch before the 100-day moving average comes into play at 132.86 currently.
Besides that, major currencies are mostly left wanting in trying to find the “next big thing” to price in. The pound will be a focus point today with the BOE coming up. This comes as GBP/USD rides just below one-year highs of 1.2660-66, trading around 1.2620 levels now. Deutsche’s view is that the pound may run into some downside risks potentially later today.
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