Futures are off slightly on the eve of another important CPI print.

continued for members…

Following tomorrow’s CPI, we get PPI on Thursday and retail sales on Friday – plenty of catalysts. ES is still within a whisper of its 1.618 – a level SPX already reached. So, we’re looking for a pullback here.

Note that VIX’s RSI is still respecting that dotted purple TL.

Equally concerning for equities is the fact that the USD is breaking out courtesy of the euro. And, CL and RB are holding support despite yesterday’s hints of a breakdown.

The 10Y broke out of the falling white channel before, only to break back in. Now it’s nudging above the channel top again.From our gas vs cpi model, it appears quite likely that CPI will be back up around 2.6-2.7% YoY for October and will be near 3.0% for November.  While gas prices have been trending lower, the decline has been quite small and slow. Prices would have to dip sharply for inflation to remain at current levels, and the geopolitical risks seem unlikely to abate any time soon.