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US Treasuries Call the Tune in FX
The higher than expected US CPI spurred a jump in rates and the greenback, but it proved to be little more than a bull trap. The dollar's upside momentum faded even before the large miss on retail sales ahead of the weekend. Yes, if one averages some recent data and squint in just the right way, the reports don't look so bad, but the point is not so much about fine-tuning Q2 GDP estimates, which are easing from still strong levels. Rather, the key questions are whether it moves the Fed's needle or encourages the market to do the Fed's heavy lifting. And both are being answered in the negative. Without higher US ... (full story)