ForexLive European FX news wrap: Markets pensive awaiting US CPI, more Trump headlines

Headlines:

• A point to note about the US CPI report later
• What is the distribution of forecasts for the US CPI?
• US inflation data in focus but will Trump tariffs steal the thunder?
• A breather in the gold rally shifts the focus back to the near-term chart
• ECB’s Villeroy: US tariffs will most likely have a negative impact on the economy
• ECB’s Holzmann: Inflation is still a threat due to tariffs
• US MBA mortgage applications w.e. 7 February +2.3% vs +2.2% prior

Markets:

• CHF leads, JPY lags on the day
• European equities higher; S&P 500 futures flat
• US 10-year yields up 0.6 bps to 4.543%
• Gold down 0.5% to $2,882.71
• WTI crude down 1.1% to $72.47
• Bitcoin down 0.3% to $96,170

It was a relatively quiet session as markets are taking a slight breather before another busy session in US trading later.

Coming up, we’ll have the US CPI report and surely more Trump headlines with the potential for reciprocal tariffs to be announced. On the latter, Trump said “we’ll see” late last night. So, that will certainly keep market players guessing in the day ahead.

As we await the inflation data, the dollar is keeping more mixed but little changed at the balance. EUR/USD is up just 0.1% to 1.0375 with GBP/USD near flat levels at 1.2450. Meanwhile, USD/CAD is up 0.1% to 1.4300 and AUD/USD down 0.3% to 0.6276 currently. It’s all still to play for in US trading later.

USD/JPY remains the standout mover but hasn’t really budged since Asia trading. The pair is still up 0.7% to 153.55 but has been hovering around 153.50-70 for the most part in European trading.

Elsewhere, equities are also looking a bit more guarded. European indices are holding on to slight gains but US futures are flat awaiting more key headlines today. The bond market is also not showing much appetite yet but yields are poised to run up for a third straight day this week. So, we’ll see.

In other markets, gold is keeping lower as the surging rally pauses for a breather. The precious metal is down 0.5% to $2,882 now, roughly 2% lower from its high earlier this week of $2,942.

It’s on to the US CPI report next before looking out for more Trump headlines.

This article was written by Justin Low at www.forexlive.com.