The US CPI data yesterday can be characterised more about the reaction rather than the data itself I would say. But if anything else, it shows the kind of bias and positioning that markets are leaning towards at the moment. The relief from all the inflation angst and higher yields in the last few months is clearly reverberating and that seems to be the trade currently.

And we might just get more of that later on, with more US economic data releases still to follow. Of note, we will be getting producer prices (PPI) and retail sales data to add to the mix after the inflation figures yesterday. The latter in particular will be one to watch I reckon, as it will offer some interesting food for thought to markets.

US Consumer

The idea now is that a soft landing is likely achievable and anything that does not mess up that narrative will be cheered. If anything else, I can see markets spinning the data to whichever way they see fit after yesterday's moves.

A softer US consumer would mean that the Fed is less likely to tighten further and that rate cuts may be the next pathway. Meanwhile, a stronger US consumer - while taking in the backdrop of lower inflation yesterday - does give more confidence towards a soft landing and that any major recession risks are less likely in the short-term.

It really depends on how you want to look at it. But from what I'm seeing, markets have every reason to keep viewing the glass to be half-full rather than half-empty now. So, barring any shocks to the data, there is reason to think that yesterday's moves may not be a one-off.