Market Update : CPI IMPORTANT TODAY

Good Morning Everyone,

Today’s CPI figures are very important. A low reading would suggest a weakening US economy and add to the recent worries about a subprime spill-over effect.

Our Index of Weekly Economic Indicators is about to make new highs – primarily due to supportive monetary figures and strong weekly chain store sales. A high reading would reinforce the bullish case for the US rate outlook.

FX: Anything can happen, but on a lower than expected reading of US CPI, we expect EURUSD in 1.34 shortly.

Fixed Income has lost momentum and a turnaround lower is not unlikely. That would be JPY bearish.

Has the market talked enough about subprime spill-over? Financial stocks with subprime exposure are being picked up…