Markets Remain Unnervingly Calm Ahead of Inflation Numbers
Liquidity conditions remain remarkably thin across currency markets as participants cut risk ahead of tomorrow’s inflation report. Equity markets are consolidating yesterday’s gains, ten-year Treasury yields are 3 basis points lower overnight, the Canadian dollar is down even as oil advances, and no major currency pair is more than a quarter-percentage point off levels that prevailed when we penned yesterday’s note. We’re borrrrrrred. Federal Reserve Chair Jerome Powell avoided providing anything that could be construed as forward guidance at yesterday’s conference on central bank independence in Stockholm. In a speech focused on the Fed’s unique and specific mandate, Mr. Powell...