From Marc to Market:
Overview: The US dollar is enjoying a mostly firmer bias ahead of today's CPI report. Sterling is the strongest among the G10 currencies after a more resilient than expected labor market report. The dollar extended its gains against the Japanese yen to a new high since last November, but the market seems cautious as it approaches JPY150, where large options expire today. On the other hand, emerging market currencies are mostly faring better. The Mexican peso and Polish zloty of notable exceptions and are nursing minor losses.
The Nikkei set new 30-year+ highs and at one point rose 3% today, the most since November 2022 before settling up nearly 2.9%. It is about 2.5% away from a record high. Most markets in the Asia Pacific region rose today, though Australia and New Zealand were exceptions. Europe's Stoxx 600 is giving back around half of yesterday's 0.55% gain. US equity index futures are trading lower after the S&P 500 and Nasdaq failed hold earlier gains yesterday. European benchmark yields are a little lower, but that better-than-expected UK jobs report is weighing on Gilts, where the 10-year yield is about two basis points higher. Gold is steadying after reaching a 12-day low yesterday near $2012. It is near $2026 European turnover. Lastly, April WTI is extending yesterday's recovery and has pushed above $77 a barrel for the first time this month. The year's high was set in late January slightly above $79.0........America
US headline January CPI is expected to rise by 0.2% for the third consecutive month. Given that last January's 0.5% increase drops out of the 12-month measure, it should be around 3.0%-3.1%. The year-over-year rate bottomed at 3% last June and was at 3.4% in December. Recall that in Q1 23, US CPI rose at an annualized rate of 4% and in Q4 23 rose at a 2% annualized rate. Similarly, the core rate is expected to have risen by 0.3% for the third consecutive month. It rose by 0.4% in January 2023, so the year-over-year rate may have ticked down to 3.7%-3.8%....
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