If bad news is good news, the economic data this morning was terrific. Retail sales and PPI both came in well below expectations, bolstering the argument for fewer rate hikes in the months ahead.
Of course, this policy ignores the reality of rising oil, housing and food prices. That’s fair, as those price increases only affect folks who sleep, eat or drive (and the growing number of people living in their cars.)
The answer, which won’t come as a surprise to any of our members: central bankers got out ahead of the news, ramping USDJPY much higher in advance of the data. The NKD gained as much as 3% overnight on rather suckish news out of Japan.The USDJPY ramp explains why ES notched all of its 10+ point gains overnight, before the good/bad news even hit the wire. And, don’t forget, Friday is OPEX.
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