The waller bounce.

Fed speaker Waller (a known hawk) gave a little boost to the 'risk environment' by mentioning potential future rate cuts. This only adds credence to the 'soft landing' narrative and a continuation of JPY or USD shorts. (I realise I'm sounding like a broken record at the moment taking about the soft landing trade but you can only trade what is in front of you).

The question now becomes: How much tolerance will the FED have to an upside surprise in inflation? Will they go back to talking about extra rate hikes again? Currently there is a 62% chance of a rate cut by next may (according to the FED monitoring tool).

For now, all is well and Thursdays PCE data will be monitored closely.