From Marc Chandler at Bannockburn Global Forex:
The dollar is mixed as the North American session is about to begin. Heightened expectations of a rate hike next week have lifted the Australian dollar to new highs since June 2022. The Japanese yen is the weakest of the G10 currencies as the dollar extended yesterday’s gains to almost JPY158.50, its best level since the Fed/Treasury reportedly checked rates on January 23. The PBOC set the dollar's fix to a new multi-year low today.
Oil prices are firm but within yesterday’s ranges. Three ships reportedly were attacked in the Strait of Hormuz and Persian Gulf earlier today. The G7 leaders will consider a proposal by the International Energy Agency to coordinate the release of 300-400 mln barrels of oil from strategic reserves. After Russia’s 2022 invasion of Ukraine, IEA members released a little more than 180 mln barrels. Estimate suggest something on the magnitude of 11-16 mln barrels a day are being disrupted by the Middle East war........Data
• The Middle East war does not make today’s US CPI moot. Rather, it will illustrate where US inflation was before the shock hit. February CPI is expected to rise by 0.3% for an unchanged 2.4% pace. Still, following a 0.2% increase in January, the annualized pace in the first two months of the year would be 6%. Moreover, last March, CPI was flat on the month, the first time since the end of 2022, warning of the risk of an increase in the year-over-year measure. The core rate is seen rising by 0.2% (0.3% in January), with the year-over-year pace steady at 2.5%. Later in the session, the February US budget deficit will be reported. Through the first four months of the fiscal year, the budget shortfall was about $697 bln compared with $840 bln in the same period in the last fiscal year. However, this includes tariff revenue that will be rebated with interest....
....MUCH MORE
