CPI Preview: Good, Bad, Ugly
CPI Preview: Good, Bad, Ugly: Start a free trial of The Sevens Report.
What’s in Today’s Report:
- Bottom Line – Growth Concerns, Not Fears
- CPI Preview: Good, Bad, Ugly
- VIX Chart – A Key Level to Watch Today.
Futures are cautiously higher thanks to market-friendly economic data overnight as traders await the U.S. CPI report.
Economically, German CPI met estimates in February (+0.4% m/m) while the U.K. jobs report showed an uptick in unemployment and easing wage pressures which is incrementally helping ease higher-for-longer policy rate fears.
Domestically, the NFIB Small Business Optimism Index was slightly disappointing as the headline edged down to 89.4 vs. (E: 89.9) but markets are largely overlooking the pre-market release ahead of the CPI data.
Today, all eyes will be on the 8:30 a.m. (ET) release of the February CPI report (E: 0.4% m/m, 3.1% y/y), Core CPI (E: 0.3% m/m, 3.7% y/y). The release has the potential to materially move markets as options data shows traders are bracing for a 1%+ move in either direction today (and it could be even more if the data surprises meaningfully either way).
Beyond the pre-market inflation data, there are no Fed officials scheduled to speak which will likely leave markets digesting the CPI release for much of the morning. In the early afternoon, there is a 10-Treasury Note auction at 1:00 p.m. ET, and the outcome of that auction could move yields and ultimately impact stocks into the close.
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