Overnight events and price action: CPI’s firmer headline was the catalyst – ANZ
Analysts at ANZ noted the overnight events and price action.
“Some recent correlations in markets broke down overnight with the higher CPI print causing yields to increase, however equites erased a knee-jerk drop to trade higher.
The USD fell and gold spiked.
All eyes were on CPI with a firmer headline and core print driving significant market moves.
US treasuries traded immediately higher and have not retraced. The 2 year is up 6bps to 2.16% and 10 year rose 7bps to 2.90%.
Yield moves in Europe were muted. US equity futures were sharply lower following the CPI print, but quickly rebounded on the open and have trended in positive territory.
S&P is up 0.5%, with Dow relatively unchanged. European bourses rebounded in tow with Euro Stoxx 50 up 0.9% and DAX up 1.2%.
The USD reacted negatively to the data, with NZD leading gains in the G10. Gold spiked on the inflation data, up 1.3% to $1350/oz.
Oil climbed after EIA suggested a smaller inventory build than the bearish API report.”