There is a lot going on besides the CPI release. Today's Marc to Market is an information, observation and analysis feast.
From Marc Chandler at Bannockburn Global Forex:
Overview: The market expects a soft US CPI print today, which has recently been associated with risk-on moves. The US 10-year yield is holding slightly above 3.50%, the lowest end of the range since the middle of last month. The two-year yield is a little above 4.20%, also the lower end of its recent range. Most observers see the Federal Reserve slowing the pace of its hikes to a quarter point on February 1. The dollar has spent the last few days consolidating after selling off last Friday and Monday. The caveat is that this would be the sixth consecutive month of slowing US CPI and many are positioned for it. This would seem to boost the risk of a counter-intuitive move on profit-taking after the news. It seems that everyone is on the same side of the trade now, and that often makes for treacherous activity.
The yen is the strongest of the G10 currencies today, rising more than 1% on a news report warning that the BOJ could adjust its policies again as early as next week's meeting. Market participants surprised by last month's move do not want to be caught off guard again and the scar tissue makes them particularly sensitive to the press report. Sterling is the second-best performer so far today, up about 0.25%, despite disruptive rail strikes. Meanwhile, Chinese officials are not protesting hard the strength of the yuan, which is at its best level since last August. However, it is the Mexican peso, which is capturing the spotlight. It is trading at new highs since February 2020....
....MUCH MORE
