Major currencies are mostly little changed as broader markets are taking a bit of a breather so far today. The US CPI data yesterday produced a chaotic reaction as the dollar went up and down, before moving back up slightly again in the aftermath. That comes as bond yields also firmed but equities had other ideas as tech stocks rallied hard.

That is making it tough to get a good grasp on things but the Fed pricing now shows that odds of a June rate cut are at ~76% with 84 bps worth of rate cuts priced in for the year. It will now come down to whether the Fed sees fit to guide markets towards a move in June or preferring to keep their options open.

But so far today, equities are more muted while bonds are also not doing much. US futures are flat while 10-year Treasury yields are down just 0.6 bps to 4.148%. That’s not giving traders much to work with ahead of European morning trade later.

The yen is an early mover with USD/JPY easing to 147.23 before bouncing back to 147.60 now. Japan’s spring wage negotiations will conclude this week and we’re already getting some early headlines here. That will keep the yen in the spotlight until the weekend, with the BOJ coming up next week.

As for European trading, there will be some light data releases to move things along. But the main focus will stay on broader market sentiment as traders digest the post-CPI reaction before another slew of US data tomorrow.

0700 GMT – UK January monthly GDP data
1000 GMT – Eurozone January industrial production
1100 GMT – US MBA mortgage applications w.e. 8 March

That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.