CPI on the agenda.

Today sees the release of US CPI data, and at the same time initial jobless claims will be reported. It is forecast that CPI will rise slightly, which I believe has been one of the contributing factors behind USD JPY's rise this week (along with poor Japanese wage growth). This could mean that the bar is high For continued dollar strength today. Any initial spike on the headline number may quickly be faded. It could be that it will take a strong 'core inflation' reading, combined with markedly lower initial jobless claims, to sustain the dollar rally.

Alternatively, a surprise soft reading will likely see the USD sell off, as we already know, the 'market' is eager to jump on any opportunity to price in early rate cuts. All in all, today's CPI is a polarising event and it's difficult to predict the outcome, which takes a 'pre event' anticipation trade off the table.

In other news, the EUR has been particularly strong, thanks to comments from board member Schnabel suggesting rate cuts in Europe are still a way off. And that additional data confirming disinflation is required. This adds credence to global Inflation data and it will be interesting to see how the central banks 'race to cut' plays out over the next few months.

Next look at charts: on the release of CPI data.