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15 Jan 2025

US CPI boosts sentiment

• Inflation trends. Softer US & UK core CPI weighed on bond yields & supported risk sentiment overnight. The backdrop helped AUD & NZD edge higher.• AU jobs. Monthly labour force data due today. There is a risk of payback after a strong report last month. Softer figures could bolster RBA rate cut bets.• Data & politics. US retail sales out tonight. China data batch released tomorrow. Next week focus will be on the US Presidential Inauguration. Global TrendsUS and UK inflation was in focus overnight and downside surprises generated a ‘relief rally’ in some of the recently beaten-up markets....

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Softening In Underlying US Inflation Triggers Global Relief Rally

Underlying inflation showed signs of decelerating in the United States last month, avoiding a widely-feared surge, and giving the Federal Reserve some breathing room as officials assess their next steps. The dollar is retreating against its major counterparts, Treasury yields are falling across the front end of the curve, and equity futures are surging as a relief rally unfolds across asset classes. Core price growth faded somewhat. According to data just published by the Bureau of Labor Statistics, the core consumer price index—with highly-volatile food and energy prices excluded—rose 3.2 percent in December from the same period last year, up...

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