US CPI is expected to be flat this morning at the headline level and up just 0.1% at the core level (excluding food and energy prices). A drop in consumer prices will raise some eye brows (combined with yesterday’s poor retail sales) and raise the specter of the Fed potentially having to maintain or expand its QE program. US yields will likely fall on a weak number, under-mining further the yield-dependent USD/JPY.
USD/JPY is probing below the 95.00 level in early US trade, eying London lows in the mid-94.80s.
94.60/75 is further support on pullbacks.
