Markets:

  • WTI crude up $1.51 to $78.16
  • US 10-year yields down 2.3 bps to 2.24%
  • CHF leads, USD lags
  • S&P 500 up 0.6%
  • Gold up $12 to $2004

What CPI report?

Tuesday's downer has seemingly been stricken from the record as stocks, bonds and the dollar have virtually erased Tuesday's big moves. The Russell 2000 is now above where it was before the 4% loss on Tuesday, powered in part by an insane run in shares of SMCI, which is the largest component of the index.

In FX, the dollar fell on retail sales data, which was soft across the board and one of the rare misses in US economic data so far this year. A soft current consumer makes it easier to believe that Tuesday's CPI report is backward-looking and that a softening economy is coming, or at least soft enough to invite a few cuts from the Fed this year.

The euro was particularly strong early in the day as it ran up to 1.0785 to nearly complete the CPI lap. It then fell to 1.0755 into the European close before climbing 20 pips from there.

The pound wasn't so fortunate as weak UK GDP numbers weighed. Comments from BOE policymakers emphasized that future quarters are looking better and that helped to put in a floor at 1.2540 in US trading and there as a 60 pip rally from there.

The antipodeans have been solid despite a lack of help from Asia. NZD briefly rose to pre-CPI levels and AUD/SUD is close. The loonie benefited from a rebound in oil prices and all three strengthened on risk appetite.

The yen was volatile as the pair gapped to 149.50 on retail sales but quickly bounced 50 pips before streching all the way to 150.25 It chopped from there back to the figure with eyes on the MOF and BOJ.

FX news wrap