The bond market was the first to turn after the US CPI data, with yields reversing higher. One can argue stocks already did see a bit of a turn with a more or less flat finish in Wall Street yesterday following modest gains at the start of the session. For today, the dollar is now seen holding slightly firmer but equities are holding a little higher as we approach North American trading.

I would say this is broader markets looking to reassess themselves, taking a cue from Treasuries. With yields turning higher and 10-year yields continuing to knock at the 100-day moving average, perhaps the knee-jerk reaction to the slightly softer US consumer inflation numbers was a bit much.

This looks like a market that is looking for further confirmation from either the data or Fed speakers in reassessing the outlook on inflation, the economy and how central banks are going to respond to the balance between all of that.

I shared some thoughts on that yesterday in this passage:

"Coming back to the report, there's just too much to decipher based on one set of numbers. I would take it that there is some evidence that inflation pressures are easing and yes, it may be caused by declining energy prices for the most part. The core reading continues to be rather sticky, even if there are signs that the surge in price pressures is cooling off slightly. The fact that it sits near 6% means the Fed is still a long way from delivering on its mandate.

In short, it is too soon to be calling this a turning point or a confirmation that a Fed pivot will be coming soon. If anything else, this is just first base. We're going to have to wait until the bases are loaded by getting confirmation from the data in the months ahead before angling for that home run.

But take nothing away from the numbers and markets' constant need to simplify their focus and approach. It is what it is. And this is a start at least."

For now, equities are holding slightly higher with S&P 500 futures up 13 points, or 0.3%, on the day. European indices were tepid early on and are also mildly higher, though gains are rather muted at the moment I would say. As much as risk trades will pounce on any opportunity to be greedy, a lack of coherence from other asset classes is something that could bring back some anxiety before the weekend.