CPI on the agenda plus yesterday's trade manually closed.

Due to not wanting to hold any risk during the upcoming RBNZ decision, I have manually closed yesterday's AUD CHF trade for a small profit of +0.3

It's been a quiet start to the forex week as it appears 'the market' is waiting for US CPI. The data will bring into focus US yields. At the recent FOMC meeting the FED didn't appear overly concerned with the last two higher than expected CPI prints. But that could change if inflation remains stubborn. I have recently read an article suggesting the US 10year could return to 5%, which would start to bring talk of just one cut from the FED or possibly no cut at all this year. At which point, the question becomes "how high can yields go before the stock market becomes unhappy".

Alternatively, we already know how eager 'the market' is to price in rate cuts, and a below consensus number would weaken the USD, at least in the short term. I wouldn't like to predict the outcome of CPI, but I am prepared to trade the USD in either direction according to the number and the reaction.

Feel free to email any questions: johnelfedforexblog@gmail.com