Daily Alert – Tuesday 12th April 2022: This afternoon’s US CPI numbers will be key

Mark NugentApril 2022, Daily Alert

Daily Alert – Tuesday 12th April 2022: This afternoon’s US CPI numbers will be key

Good morning.

Yesterday was risk off with the markets focussing on inflation and fears of a recession. It is not clear what new information is driving this focus as we have not had a US inflation number since PCE on 31st March. It may seem strange, but markets are less concerned now about Ukraine and the focus is now fully back on inflation.

The US 10-year yield is zooming up, dragging the USD with it. Equities are down because every part of the inflation-rate hikes-recession narrative says “bad for equities”. Strangely, the JPY fell yesterday, but not by much.

The big event today is US Headline and Core CPI, out at 1330 BST. If the numbers exceed expectation, it will add fuel to the inflation-rate-hike-recession horror show and we can expect the USD and 10-Year yield to continue to climb and equities to fall. Of course, if the CPI numbers miss expectation, some steam is sure to be let out of the system.

We will be back tomorrow.

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