US PREVIEW: Unrounded Core CPI Estimates Point To Upside Risk In January
Feb-11 10:53
Today’s NFP report is clearly in immediate focus but we quickly look ahead to Friday’s CPI report, where unrounded core CPI estimates point to upside risk to consensus compared to more in-line/softer readings for headline.
- We see a median of thirteen unrounded estimates for core CPI at 0.36% M/M (Bloomberg cons 0.3) having surprised clearly lower back in December with 0.24% M/M vs the median estimate of 0.35% at the time.
- This monthly strength also translates to upside risk for the Y/Y figures in NSA data, with a median 2.6% vs 2.5% consensus after 2.64% in December. Include a wider range of rounded estimates and this would sit on the cusp of a 2.5-2.6% Y/Y print (to be shown in a second table in part two).
- Headline estimates look more in line with consensus however, with a median 0.29% M/M (Bloomberg cons 0.3). They are also closer to the rounded consensus of 2.5% Y/Y with some seeing risk of rounding lower.
- A smaller sample of unrounded estimates for core PCE currently tracks at 0.39% M/M in December and 0.38% M/M in January. The delayed December PCE report is currently due to be released on Feb 20 before the January report on Mar 13.
- The full MNI US CPI Preview will be published later today once the payrolls report is fully wrapped up.
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US TSY FUTURES: CFTC CoT Shows Asset Managers Remain Long, Funds Still Short
Jan-12 10:51
The latest CFTC report shows a reduction of non-commercial net shorts across much of the futures curve over the New Year period, with the only exception coming via US futures, which saw positioning revert to net short after a single week in net long territory (see table below for greater detail).
- Asset manager positioning was little changed in net DV01 terms, with instances of net long setting (TY, UXY & US) roughly offset by episodes of net long cover (TU, FV & WN). The cohort remains net long across
- Meanwhile, short cover dominated for hedge funds in net curve-wide DV01 terms (short setting in TU & US futures was outweighed by short cover in the remaining contracts). The cohort remains net short across the curve.
- We wouldn’t read too much into positioning swings over this period as they came over the end of the year and do not capture Friday’s post NFP swings (more to come on that in the daily OI bullet).
Source: MNi - Market Nws/CFTC/Bloomberg Finance L.P.
OUTLOOK: Price Signal Summary - S&P E-Minis Pullback Appears Corrective
Jan-12 10:45
- In the equity space, the trend structure in S&P E-Minis remains bullish and today’s move down is considered corrective. Price continues to trade above key support at 6771.50, the Dec 18 low. Clearance of this level is required to signal scope for a deeper retracement and would also highlight a possible short-term reversal. First support is at 6933.61, the 20-day EMA. For bulls, a fresh cycle high on Friday reinforces a bull theme. A resumption of the trend would open 7021.79, the 0.618 projection of the Nov 21 - Dec 11 - 18 price swing.
- A bull cycle in EUROSTOXX 50 futures remains intact. Gains last week confirm a resumption of the primary uptrend. Note that MA studies are in a bull-mode position, highlighting a dominant uptrend. The 6000.00 handle has been breached, signalling scope for 6086.99 next, a 1.236 projection of the Nov 21 - Dec 12 - 18 price swing. Firm support to watch is 5819.97, the 20-day EMA. A pullback would be considered corrective and allow an overbought condition to unwind. First support lies at 5912.00, the Jan 8 low.
AUD: AUDUSD Back Above 0.6700, Sell-US Theme Trumping Weaker Equity Backdrop
Jan-12 10:41
- Risk-off sentiment has been notably dented surrounding the renewed concerns around Fed independence, and while the likes of AUD and NZD might usually be pressured by such a backdrop, the weak dollar theme is driving the price action for most major FX pairs to start the week.
- As such, AUDUSD has retaken the 0.6700 handle and potentially emphasises that last week’s late pullback is very much deemed as corrective, which was allowing an overbought condition to unwind. The area between the 20- and 50-day EMAs represents a key support zone for the pair, with the latter average intersecting at 0.6627.
- JP Morgan have remained bullish on AUD given its relatively attractive carry profile, robust economic backdrop, and sound fiscal position. They do note that the magnitude of the rates sell-off since late 2025 and November’s weaker-than-forecast inflation data have seen rate hike expectations gradually pared back somewhat. With AUDUSD now aligned with their Q1 target, JPM think near-term upside in the exchange rate is more contained although an ongoing decline in USDCNY has the potential to open up more upside and push fair value towards 0.69.
- Westpac consumer confidence due Tuesday and consumer inflation expectations on Thursday highlight this week’s calendar. Key upcoming data points are December employment on Jan 22 and the key Q4 CPI release on Jan 28.
