The focus of the market is gradually shifting from inflation to growth, with softer CPI and declining retail sales signaling a change in direction. Yesterday marked a turning point, as economic reports showed that initial jobless claims were slightly higher than expected but still at historically low levels. Today’s reports were mixed, with housing starts and the Philly Fed missing estimates, while import/export prices were higher than anticipated. Despite this, Fed rate cut pricing decreased slightly and Treasury yields rose, with US 2-year yields up 3.0 basis points on the day.
The USD/JPY has followed the movement in yields, seeing an increase of 31 pips to a session high at 155.21. The market movements may not necessarily be directly linked to economic data, with some attributing them to position squaring and a market breather. S&P 500 futures are currently flat as the market continues to adjust to changing economic indicators and data points.
