It's been a bit of a lackluster day so far and that sense of lull may yet continue in Europe today.
All eyes are on the US consumer inflation report later and there isn't likely to be much conviction in markets before we get to that. Major currencies are little changed alongside Treasury yields while equity futures are also not hinting at much after the gains yesterday.
The immediate focus will be on the dollar and Treasuries but I reckon the upside for the former is rather limited unless inflation surprises heavily to the upside. The only point in which dollar bulls can build further upon is for a 50 bps rate hike in March and that will require some sense of urgency by the Fed amid "out of control" inflation.
But watch out for 10-year Treasury yields as it closes in on the 1.97% and 2.00% levels. Those are still key ceilings in limiting any further breakout for the time being.
What are your views on the market right now? Share your thoughts/ideas with the ForexLive community here.
