Here are some previews to wrap your heads around the release coming up later:

I'm not going to go into too much details on the estimates as such. The bottom line is that the headline reading is estimated to be a little "sticky" at 3.2% y/y while the core reading is likely to have eased a little more to 3.8% y/y. As always, the core reading is likely to take more emphasis and even more so in this instance since it favours what markets are looking for in the bigger picture.

The main reaction to watch will be in the bond market. 10-year Treasury yields continue to linger in and around the 4% mark but are unable to break above the 200-day moving average of 4.048% for now. The 23.6 Fib retracement level at 4.075% adds to some minor resistance for yields but traders are looking for a trigger to really get moving, and this could be it.

UST10Y
US Treasury 10-year yields (%) daily chart

But if markets are favouring a softer view on the inflation numbers today, a return to the November and December price action looks like the play. And the bar for that is rather low in my view. It will take a beat on both the core and headline readings to really convince traders of otherwise.

And even so, this is just one reading after many months of inflation pressures easing. If traders were to brush this report aside, they easily could. But given the tentative start to the year, it certainly keeps things interesting for now. After the action from last week, if there is to be a trigger for that to continue, this would be it.