Markets Advance as News Flow Ebbs
With the number of US data releases slowing to a trickle and next week’s all-important inflation print looming ahead, risk assets are inching higher, leaving currency markets largely rangebound. Equity futures are advancing while yields come under pressure – translating into a slightly weaker dollar. Implied volatility levels are coming back down, suggesting that a post-jobs report bounce in yields has helped reset market positioning to more neutral levels – reducing the perceived risk of a big washout around the January consumer price index release. Implied terminal rate expectations are holding between 5.1% and 5.2%, up from the 4.9% area...