The rout in equities and rush into US dollars yesterday didn't quite add up. The bond market has been driving the bus lately but sat out yesterday.
There is certainly some fear about central bank hikes out there, regardless of today's CPI but I wonder if the bulk of the moves we saw yesterday were more of a fear-of-a-high-reading trade.
The consensus on CPI is +8.3% y/y on the headline and 5.9% y/y on the core. For the m/m readings it's +0.7% on headline inflation and +0.5% on core.
All of those numbers are high to begin with but I'm thinking that if we see a one or two-tick upside surprise we could get a relief rally in stocks anyway? And certainly if the numbers are in line.
It's a tough call because it's a volatile market and tech doesn't need much of an excuse to wash out.
CPI isn't the only report out either. We'll get Canadian jobs at the same time with the consensus at +30K.
