It was a quieter session as markets are lacking any real follow through after the US CPI report yesterday.

The inflation numbers pretty much affirm a 25 bps rate cut by the Fed next week and that’s keeping things in check so far on the week.

The dollar remains steady on the day, keeping little changed against the rest of the major currencies bloc. USD/JPY did work its way up to clip 143.00 briefly but is now back down to near flat levels around 142.40-50.

Besides that, the euro remains caged in with large option expiries in EUR/USD not allowing much breathing room until we get to the ECB later.

Even then, the 25 bps rate cut that will come from the ECB is already well telegraphed. So, there should not be any major price movements involving euro assets unless Lagarde steps wrongly.

In the equities space, we are seeing a calmer mood as well with US futures mildly higher. European indices are playing a little bit of catch up to Wall Street gains overnight. As for the bond market, things are calmer today as the bid in bonds is subsiding a fair bit. 2-year Treasury yields are now back up to 3.66%, backing off after testing its 2023 lows near 3.55% yesterday.

All eyes now are on the ECB and more US data to come on the day. The latter will feature the weekly initial jobless claims and PPI data. So, that will keep markets interested going into North America trading later.