Market Brief, North America

The greenback remains modestly stronger after yesterday’s data showed inflation running too hot for the Federal Reserve’s comfort. Equity investors – largely prepared for a repeat of January’s stronger-than-expected print – shrugged and kept bidding indices higher. But with core price growth topping expectations for a second month in a row, currency traders doubled down on bets interest rate differentials would remain tilted in the dollar’s favour, temporarily snapping a month-long slide in the DXY index. The “dot plot” presented after next week’s Fed meeting could prove more important than the decision itself. A material change seems unlikely, but remarkably-loose...

The dollar’s selloff is slowing ahead of inflation numbers that could have a direct bearing on the policy outlook presented during next week’s Federal Reserve meeting. Equity futures are trending upward, but Treasury yields are holding flat, and high-beta currencies like the Canadian dollar are coming under modest selling pressure as traders cut risk. February’s consumer price index is expected to show headline prices accelerating while the core measure slows – but considerable uncertainty remains around whether January’s hotter-than-expected numbers marked the beginning of a trend. If price growth remains stubbornly high, officials could reduce the number of expected rate...