Another rally into a CPI report (tomorrow.) Last month it set off a wild negative reversal day, and in November it triggered a big rally followed by some sideways action but positive.
Yields are down slightly and the dollar is flat and dancing on the recent lows.
It looks like the market is bracing for a favorable report. Unfortunately the Fed doesn't seem to care as much about price improvement as it does about wage data so it's questionable whether a CPI driven rally can hold again.
Earnings estimates will dominate the second half of January and there isn't another Fed meeting until February so the bulls and bears will play for the next several days and make of the CPI what they will.
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