Barclays said prior to the US inflation data released on Thursday that:
The upside surprise in inflation in the data has eaten into expectation a little, but only a little.
- Markets remain too aggressive around interest rate cuts expectations
- the December CPI may not be enough to change this perception
- (but) it could be a first step in allowing markets to align with the Fed’s narrative that cuts will come but not just yet
Incoming data and speeches will give us more information, but I’m sticking a fork in thoughts of a March cut, nope.
This article was written by Eamonn Sheridan at www.forexlive.com. Source