Daily thread to exchange ideas and to share your thoughts
The dollar is keeping in good stead to start the new week as it looks to build on the gains last week as Fed speakers continue to reaffirm the taper narrative for now.
The US CPI data tomorrow is a key risk event to add to the picture but regardless of what the report says, I would argue that the supposed ‘transitory’ inflation is going to persist for much longer and that will continue to put pressure on the Fed to act.
A softer report may alleviate some pressure off risk trades and dent the dollar a little but I don’t expect that to be too lasting with the focus turning to the FOMC next week.
Looking elsewhere, oil is testing the $70 level again to start the week and while recent gains have been capped by the key level, a daily break could set the stage for gains to run further on the week.
Besides that, keep an eye on the growing risks from the broader regulatory crackdown in China across multiple sectors as that continues to pose a threat to sentiment in general.
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