As was the case with the US nonfarm payrolls release and ISM, the US CPI data is 'in the price'.
Despite US March CPI coming in at 0.6% month-on-month and 2.6% year-on-year, higher than expectations, there has been absolutely no " rock the boat" pice action with rates markets priced to perfection.
And with the FOMC taking a more activist approach to manage labour markets, the reaction in the US yields market suggest US data doesn't mean much for policy normalizing until maybe September or beyond based on the FED's new "string theory". Wich opens the door to more risk taking.
The US 10-year yield spiked 1bp, then quickly dropped back to where it was at 1.6780%. And the dollar reaction is even more telling, EUR/USD slides down and quickly recovers and then picks up a head of steam ploughing higher
It has been so well discussed and telegraphed that the market reaction and tail risk would have been to a soft inflation number rather than strength.
Johnson & Johnson Vaccine
The Food and Drug Administration and the Centers for Disease Control will stop using the Johnson & Johnson (NYSE:JNJ) vaccine at federal sites and urge states to do so as well. At the same time, they examine the safety issues, The New York Times reports.
Trading this market can be at times similar to getting trapped on a revolving carousel of misfortune, whether it is "the two steps forward and one step back" in stocks as the US yields ebb and flow, the more obvious Covid headline scares or the back and forth bubble concerns in China. It becomes almost a catch- as --catch can experience rewind and then unwind hedges almost daily on some assets.
Fortunately, the US vaccination rollout is well underway, so the downside effect on both oil and US stocks should be fairly limited; however, with SPX positioning at frothy levels, there's been a predictable negative reaction to the headline none the less.