Market Brief, North America

A sense of caution is settling over financial markets this morning, with North American equity futures setting up for a weaker open, commodities under pressure, Treasury yields rising, and the dollar in recovery mode. Markets went on a bit of a drunkard’s walk after yesterday’s print. Risk sensitive assets rallied in the moments after the release as investors found their worst fears had not been realized, but then seemed to fall as stubbornly-strong services prices lowered the likelihood of a meaningful Fed pivot in the months ahead. Oscillations continued throughout the day as position adjustments unfolded and traders struggled to...

Global financial markets are growing increasingly nervous ahead of tomorrow’s US inflation report. The dollar is up, yields are inching higher, and equities are down. Implied volatility levels are slightly elevated, and risk-sensitive currencies like the Canadian dollar are on the defensive.  Today’s data calendar is light, with the Federal Reserve’s Michelle Bowman discussing topics unrelated to monetary policy, and Japan reporting fourth quarter gross domestic product.  January’s consumer price index update could prove destabilizing for markets that have spent much of the last four months betting on a rapid easing in inflation pressures. The Bureau of Labor Statistics is...