How hard has this CPI report been front-run?

The consensus on today’s CPI is 3.0% y/y with core at 3.2% but I suspect it’s going to have to be well-below that to keep yields falling and stocks going up.

The market front-run a soft (or at least in-line) CPI when yesterday’s PPI was released and has continued to pile in after UK CPI.

To be clear, I strongly believe that the global inflation story is done being a problem for markets and central banks but this has all the hallmarks of a ‘buy the rumour, sell the fact’ trade.

After we see the kneejerk, I don’t necessarily believe the market will turn towards a risk-off mode for long. The drivers of the rout last week have eased and buy-the-dip is working, along with big tech again. Watch bitcoin for clues on intraday risk sentiment.

This article was written by Adam Button at www.forexlive.com.