<p>The US dollar is higher across the board in the countdown to CPI.</p><p>Yesterday, the strong dollar foreshadowed a rout in risk assets but I’m not (yet) sure that’s what we’re also seeing today. It does warrant some caution.</p><p>The Eurozone data calendar was basically vacant so far today except for a mixed Italian industrial production report so the moves are primarily a follow-through from yesterday.</p><p>In any case, CPI could quickly upend the narrative. This one is a particularly important report with the market no longer feeling confident that 5% will be the Fed’s top. The consensus is +8.0% y/y on the headline and +6.5% y/y on the core. </p><p>Risks are two sided with any kind of miss likely to spark a big reaction in risk assets. Dollar longs are a crowded trade so you wouldn’t expect to see strength into the report but that’s what is happening and, I think reflects lingering fallout from yesterday’s risk rout and the ongoing disaster in crypto.</p><p>h/t <a target=“_blank“ href=“https://twitter.com/BeaglierCap/status/1590611613933252608?t=FiNlKtBfzB-_iMP8-GWDSQ&s=03″ role=“link“ tabindex=“-1″ class=“css-4rbku5 css-18t94o4 css-1dbjc4n r-1loqt21 r-1wbh5a2 r-dnmrzs r-1ny4l3l“>@BeaglierCap</a> for the meme.</p>

This article was written by Adam Button at forexlive.com.