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 said “restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy,” suggesting that “The absence of direct political control over our decisions allows us to take these necessary measures without considering short-term political factors”. Traders, who were bracing for more hawkish rhetoric, sold Treasuries and added to risk-sensitive positions as his comments were published.

The Australian dollar is incrementally higher after the latest inflation and retail sales numbers beat expectations. The Australian Bureau of Statistics’ monthly consumer price indicator—a higher frequency version of the more comprehensive quarterly consumer price index—climbed 7.4 percent on a seasonally adjusted basis in November from a year earlier, accelerating from 6.9 percent in October and beating economist expectations. Retail sales jumped 1.4 percent in the month, almost doubling expectations, as household spending remained remarkably robust in the face of a historic interest rate shock. Traders think the Reserve Bank of Australia will respond with another quarter-point hike at its February 7 meeting, with rates ultimately climbing to around 3.9 percent from the current 3.1.

Today’s economic data cupboard is essentially bare, with weekly North American energy inventories—generally estimated and traded in advance of the release—set to land at 10 am.

Economists think tomorrow’s data will show the headline consumer price index climbing 6.5 percent in the year to December, slowing from November’s 7.1 percent. On a month-over-month basis, prices are seen falling -0.1 percent following a 0.1 percent increase a month earlier. With food and energy prices excluded, the core measure is expected to rise 5.7 percent year-over-year, up 0.3 percent over the prior month. Hotter-than-forecast data could lift odds on a half-percentage point move at the Fed’s February meeting, while an unexpectedly decisive softening could unleash a rally across markets as investors double down on bets that terminal rates will fall short of the 5-percent mark.

The boredom won’t last.