CPI drifted lower in February, coming in below consensus at 0.2% MoM and 2,8% YoY. Core was also 0.2% MoM and registered 3.1% YoY. The print was in line with our model, which also suggested a bounce yesterday, Futures, initially up 1.5%, are indicating a still strong 1% higher.

continued for members…

The ambitious goal for the day: a backtest of SPX’s SMA200 at 5735

The key for that kind of upside will be VX and VIX breaking down below their TLs. EURUSD is still stuck at resistance, while USDJPY is rallying and should at least backtest its SMA200 after bouncing at our 147.65 target. It’s been a while since the market benefited from the yen carry trade. But, there’s plenty of room to rally, which of course, benefits inflation as oil and gas become cheaper.

CL and RB are both up over 1%, but inventories will be released later this morning which could affect the short term picture. The 10 is slightly higher… …bumping the 2s10s up to 34 bps. A breakout would occur at 47ish.