The FOREX reversal caused by a 'better-than-expected' US CPI (i.e. broadly stable at 3.3%) is violent: as violent - if not more so - than last Friday's after the publication of the NFP (when the Dollar tested a critical threshold at 1.0900/E, threatening to reverse its medium-term uptrend.
Symmetrically, the euro is up +1% this evening at 1.0845, also +1% from the day's low.
The Yen recovers 0.8% to 155.8, the Pound +0.85% to 1.2845 and the Swiss Franc +0.7% to 0.8910.
The Dollar-Index falls -0.9% to 104.30, its level of last Wednesday.
A single 'better than expected' inflation figure from the US and spring returns to the bond markets, with T-Bond yields in free fall.
The '10-yr' is not far off recording its best session of 2024, down 15 basis points to 4.259%, while the '2-yr' is also down 15 basis points to 4.682% (it was close to 5% last Friday).
As a result, the consensus for a September rate cut is back above the 50% mark.

Beware, the day is not over yet: the Fed's announcements are due at 8:00 p.m. (Paris time), followed by a press conference by Chairman Jerome Powell at 8:30 p.m.
This may temper the impression that, with the 1st good figure of the year (after 4 bad ones), inflation is about to be brought down.

In Europe, the spectre of a chaotic situation has largely receded after Monday and Tuesday's episode of weakness: the single currency is recovering, despite the uncertainty that continues to hang over the trajectory of deficits and the means of resolving unsustainable debt.

The morning had been punctuated by the publication of the latest German inflation figures: the consumer price index (CPI) - was +2.4% in May 2024 according to Destatis, up +0.2% (in April and March 2024, the Rate was +2.2%).

After two months of increases, British industrial production fell again in April. The Office for National Statistics (ONS) reported this morning that industrial production was down 0.9% on the previous month.

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