Some levels to watch over the data
In USDJPY I’m watching 110.25/30 & 110.00 on the downside and 111.40/50 on the upside. The area in and around 111 is a consideration but that depends on where the price is over the data. 110.75/80 remains the top so far and 111.45 looks stronger resistance than the levels in and around 111.00.
For the data itself, quite a move expected for CPI at 1.5% vs 1.9% prior y/y. Core expected at 2.1% vs 2.2% prior y/y. With most CB’s touting softer inflation and the Fed in neutral, the bigger price risk is for better numbers, or at least not as bad as expected. Wages remain a focus of the data too as that could counter/add to what the CPI says. No expectations for those but weekly earnings were 0.7% m/m in Dec & 1.2% y/y. Hourly was 1.1% prior y/y.
This one report is unlikely to be a game changer for the Fed so roll with the punches.
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