The CPI showed a higher than expected rise of 0.4% for core inflation versus 0.3% expected. The headline number was up 0.6% as expected. The YoY for core was higher-than-expected at 2.8% versus 2.7%. The headline came in at 3.8%. The CPI has been above 2% since March 2021. That is a lot of compounded CPI price gains. The US yields have actually dipped a bit vs pre CPI levels. The two year yield is at 3.962%, up 1.5 basis points. The 10 year is up 1.1 basis points at 4.422%.US stocks in premarket trading are a little bit better but still lower on the day with the NASDAQ down -208 points and the S&P down -20 points.Crude oil remains elevated with the price up $2.65 on the day at $100.75 but below the high for the day at $102.05. The price is trying to hold support at the 200 hour MA at 100.36. Looking at the US dollar, the EURUSD retested it's a 200 hour moving average at 1.1736, but is trading backup at 1.1745 currently. The price remains between its 100 hour moving average above at 1.17587, and it's 200 hour moving average below at 1.1736. Traders will be looking for a break with momentum.The USDJPY continues to trade above the 200 day MA at 157.36 and is trying to hold support above the 38.2% of teh move up from the February 12 low at 157.496. The upside target remains between 157.97 and 158.26. Rallies have been met with threat of intervention which could keep sellers in play. Watch 100 day MA and below that the 200 hour MA at 156.99 and below that the 100 hour MA at 156.80. The GBPUSD dipped to the high of the swing area between 1.3497 to 1.35128 and is bouncing. The price is trading near 1.3530 currently. The price is still down -0.56% on the day as the market reacts to the ship sinking for PM Starmer. A 3rd minister - Labour Minister Davies-Jones - has resigned. USDCAD runs up to the ceiling between 1.3708 up to 1.3715. The 100 day MA is close by as well at 1.37182. Stay below that ceiling up to the 100 day MA keeps the sellers in play. The current price is trading at 1.3703. The high for the day reached 1.3712. This article was written by Greg Michalowski at investinglive.com.

Prior was +3.3% y/yCPI m/m +0.6% vs +0.6% expected Prior m/m +0.9%Core measures: Core CPI m/m +0.4% vs +0.3% expected. Last month +0.2% Core CPI y/y +2.8% vs +2.7% expected. Last month was +2.6% Real weekly earnings -0.2% vs -0.9% priorShelter +0.6% vs +0.3% last month Shelter y/y +3.3% Services less energy services +0.5% m/m vs +0.2% prior Services less energy services y/y +3.3% Food +0.5% m/m vs 0.0% m/m prior Food +3.2% y/y Energy +3.8% m/m vs +10.9% m/m prior Energy +17.9% y/y Rents +0.5% m/m vs +0.2% prior Owner's equivalent rent +0.5% vs +0.3% prior Gasoline +5.4% m/m vs +21.2% prior Used cars and trucks 0.0% m/m vs -0.4% prior New vehicles -0.2% m/m vs +0.1% prior Airline fares +2.8% m/m vs +2.7% prior (+20.7% y/y) Lodging away from home +2.4% m/m Apparel +0.6% m/m vs +1.0% prior Medical care services 0.0% m/m vs 0.0% prior Medical care commodities -0.4% m/m vs -1.0% prior Hospital services -0.3% m/m Motor vehicle insurance +0.1% m/m vs 0.0% prior (+0.2% y/y)Energy was again the headline mover, accounting for over forty percent of the monthly all-items increase, though the pace slowed sharply from March's +10.9%. Gasoline rose +5.4% m/m after surging +21.2% the month before, but the year-over-year gasoline number is still running at +28.4%. Fuel oil added another +5.8% m/m and is up +54.3% y/y. Electricity rose +2.1% m/m and is +6.1% y/y. The shelter story re-accelerated. After three months of +0.2% to +0.3% prints, shelter jumped to +0.6%, with OER and rent both at +0.5% and lodging away from home up +2.4%. It's the main reason core moved back to +0.4% after two months at +0.2%. Outside of shelter, the core breadth was wider than recent months. Household furnishings and operations +0.7%, personal care +0.7%, apparel +0.6%, airline fares +2.8%, education +0.2%, and recreation +0.1% all added on the services and core goods side. Offsetting that: new vehicles -0.2%, communication -0.2%, medical care commodities -0.4%, and hospital services -0.3%. Used cars were flat after two -0.4% prints. Food at home rose +0.7% m/m, the firmest reading in some time, led by beef +2.7%, fresh vegetables +3.9% (tomatoes +15.1%), nonalcoholic beverages +1.1%, and dairy +0.8%. Eggs ticked up +1.5% m/m but are still -39.2% y/y as the base effects from last year's spike continue to wash through. On the broader aggregates, all items less food, shelter and energy was +0.2% m/m and +2.3% y/y. Commodities less food and energy commodities were flat at 0.0%. Services less energy services at +0.5% m/m was worrisome for the Fed. A reminder on the data gap: October and November 2025 CPI were not published due to the appropriations lapse, so year-over-year comparisons span an unusual reference period. BLS also rebased a number of series to December 2024 = 100 with this release. The next CPI report, for May, is scheduled for June 10. This article was written by Adam Button at investinglive.com.

The weekly National Employment Report from ADP showed a gain of 33K vs 39.25K last week. The figures have been between 30K and 40K over the last 5 data weeks showing solid job market. Three times a month, Main Street Macro releases the NER Pulse, an estimate of the week-over-week change in employment based on a four-week moving average. These releases are seasonally adjusted and have a two-week lag to allow for more complete and accurate estimates of real-time employment trends. At the beginning of each month, we publish the National Employment Report, which is built on a reference week that includes the 12th day of the month. We do not publish the NER Pulse during NER release weeks. This article was written by Greg Michalowski at investinglive.com.

As the North American session gets underway, the US dollar is trading higher against the major currency pairs. In the video, I take a technical look at the roadmap for the three major pairs — EURUSD, USDJPY, and GBPUSD — as traders position ahead of the key US CPI report at 8:30 AM ET.The dollar is currently higher by 0.36% versus the euro, 0.27% against the Japanese yen, and 0.62% versus the British pound. The stronger dollar tone comes as traders balance rising geopolitical tensions, higher oil prices, and expectations for inflation data that could influence the Fed outlook going forward.For the CPI report, expectations are for core CPI ex-food and energy to rise by 0.3% month-over-month, while the headline reading is expected to increase by 0.6%, largely due to the sharp rise in energy prices. On a year-over-year basis, forecasts are for core CPI at 2.7% and headline inflation at 3.7%. The data will be a key catalyst for yields, the dollar, and overall risk sentiment.Fundamentally, markets remain focused on developments surrounding the war in Iran after President Trump rejected Iran’s response to a proposed ceasefire agreement, calling the response unacceptable and signaling frustration with the negotiations. At the same time, President Trump is scheduled to travel to China tomorrow with a delegation of business leaders for meetings with President Xi, adding another major geopolitical event for markets to digest.In the UK, political uncertainty is also weighing on the pound, with reports that more than 80 MPs are calling for Prime Minister Starmer to step down following recent political setbacks.In other markets, crude oil prices continue to move higher, with WTI crude futures up $3.27, or 3.33%, at $101.37 as traders price in ongoing Middle East supply risks. Gold is lower by $28, or -0.59%, at $4,704, while silver is giving back part of yesterday’s sharp rally, down $2.32, or -2.70%, at $83.78.Meanwhile, Bitcoin is trading back near the $80,000 level at $80,700 after failing to extend above its 200-day moving average — the green line on the chart below — during the recent rally attempt. The inability to break and stay above that key technical level keeps the broader bullish bias in check for now.US stocks are lower in pre-market trading with the S&P down -29 points and the Dow down -50 points and the NASDAQ index down -260 points.US yields are trading higher with the two-year up 3.8 basis points at 3.985%. The ten-year is now up 2.5 basis points at 4.436%. The U.S. Treasury will optional tenure notes at 1 PM ET. The three year note auction yesterday did not go very well with tepid demand from domestic buyers. This article was written by Greg Michalowski at investinglive.com.

India's CPI rises to 3.48% in April, driven by accelerating food inflationIntel stock analysis today: After a 510% surge, is INTC starting to show topping risk?US April NFIB small business optimism index 95.9 vs 96.1 expectedGermany May ZEW survey current conditions -77.8 vs -77.8 expectedUSD/JPY rebounds into a key resistance as interventions can't stop yen's slideECB policymaker Nagel says data will determine ECB's decision in JuneUS, Japan both believe forex volatility is undesirable - BessentWhat is the distribution of forecasts for the US CPI?The overall risk mood leans more defensively as we get into European trading todayWhat are the main events for today?A quick drop in USD/JPY before bouncing back upGermany headline inflation nudges up on higher energy prices due to Middle East conflictFX option expiries for 12 May 10am New York cutUS, Japan maintains robust coordination in dealing with FX market volatility - BessentJapanese yen starting to slip away again, will Tokyo officials step in?The risk mood in the session has been leaning on the defensive ahead of the US CPI report in roughly an hour. The culprit though is the lack of any breakthrough in the US-Iran stalemate. We've been getting reports since yesterday that Trump is now considering a resumption of the war more seriously as the ceasefire holds on "life support" after a "garbage" Iran's peace proposal. The reports added that no major decision is expected before Trump-Xi summit.The most notable mover was the Japanese yen as the currency whipsawed early in the session after another suspected intervention. US Treasury Secretary Bessent reaffirmed in a post on X "the strong economic partnership between the United States and Japan". He also added that the level of communication and coordination between their teams in addressing undesirable, excess volatility in currency markets continues to be constant and robust. This wasn't the culprit for the spike in the yen though and in any case, the move was quickly erased and the USD/JPY pair rallied back into the key resistance zone around the 158.00 handle. The macro backdrop remains negative for the yen and this is likely to keep weighing on the currency.In terms of economic data, we got the German ZEW index showing business conditions worsening further, with it being the worst since December last year. The US NFIB Small Business Optimism Index was basically unchanged from the prior month, with inflationary pressures continuing to be the major challenge. Lastly, India's inflation climbed to 3.48% in April, primarily driven by firming food prices.In the American session, the main highlight will be the US CPI report. Headline CPI Y/Y is expected at 3.7% vs 3.3% prior, while Core CPI Y/Y is seen at 2.7% vs 2.6% prior. Elevated energy prices have pushed headline inflation back above the 3.0% mark. Inflation was elevated before the war started though and this latest shock just added more upside risk. I don't think today's data is going to change much for the market unless we get significant deviations from the expected numbers.For context, the annual Core PCE rate (which is what the Fed targets) has been sticky near the 3.0% level since 2024 and recently rose to the highest level since December 2023. Also, let's not forget that the Fed has been missing its 2% target since 2021. Fed's Hammack recently said that there are concerns among businesses that an inflationary mindset is starting to become entrenched in people's minds.In the markets, it's been kind of consensus that the Fed has abandoned the 2% target and now focuses more on keeping it in a 2-3% range like the RBA. With such expectations it could be very hard to get inflation sustainably back to the 2% target without a more significant slowdown in the economy. The problem is that the Fed has been focusing more on the labour market and the soft landing, which had the side-effect of indirect financial easing through stock markets. This article was written by Giuseppe Dellamotta at investinglive.com.

Prior 95.8Of the 10 Optimism Index components, seven increased and three decreased. Earnings trends improved, but were offset by a deterioration in expected business conditions.Bill Dunkelberg, Chief Economist at NFIB said: “Inflationary pressures continue to be a challenge for Main Street. While small business optimism is currently fragile, the benefits of the Working Families Tax Cut Act should start to feed into the private sector over the next few months.” This article was written by Giuseppe Dellamotta at investinglive.com.

Prior -73.7Economic sentiment -10.2 vs -19.8 expectedPrior -17.2The headline reading shows that the read on business conditions are seen worsening further, with it being the worst since December last year. The fallout from the US-Iran conflict has turned around the optimistic rebound in sentiment since the turn of the year. That as Germany's manufacturing sector is set to be hit hard by the negative impact of rising energy prices and tightening supply chains.The bright side though is that we are seeing an improvement in the outlook reading. While still in negative territory, it is a marked rebound after having fallen to the lowest since December 2022 in April last month.Perhaps it is a signal that financial market experts are keeping more optimistic that there will be a positive news on the US-Iran conflict. That being said, the fact that the Strait of Hormuz remains closed will continue to apply a strain to the overall German economy. So, it might be quick to jump the gun to say that the worst is over already. This article was written by Justin Low at investinglive.com.

FUNDAMENTAL OVERVIEWUSD:The US dollar regained some ground at the start of the week as both Trump and Iran rejected the respective war-ending proposals calling them unacceptable and leaving the two sides miles apart on any potential agreement. Moreover, there are some reports pointing to a possible restart of the war, which keeps the geopolitical risk high.This kind of headline noise has been going on for several weeks and kept the price action in rangebound mode as traders continued to wait for new developments before picking a direction. Looking ahead, the Fed is slowly abandoning the easing bias amid resilient US data and elevated energy prices. The reopening of the Strait could weigh on the greenback in the short-term as oil prices will likely crater and rate cut bets will increase. After that though, the focus will quickly turn back to the Fed and the economic data. With the end of the war, the increase in economic activity could keep inflation higher for longer and eventually even require rate hikes to bring it sustainably back to the 2% target that the Fed has been missing since 2021.There’s also another scenario where the Strait remains closed for longer and oil prices stay elevated, with the risk that the Fed turns hawkish anyway and gives the greenback a strong boost given the bearish positioning on the dollar. JPY:On the JPY side, nothing has changed fundamentally. Japanese officials have been intervening in the FX market, but yen sellers have been quick in fading the moves due to the persistently negative macro backdrop. The BoJ recently left interest rates unchanged at 0.75% as widely expected but the highlight of the decision weren’t the three dissenters voting for a rate hike, but Governor Ueda adopting a less hawkish stance. In fact, he noted that they want to take a little bit more time in gauging how the Middle East situation would affect Japan’s economy and acknowledged that underlying inflation is currently a bit below the 2% target.He added that they expect underlying inflation to be around 2% from second half of 2026 but admitted that he doesn’t know how many months it would take to gauge timing of their next rate hike. This is going to keep weighing on the Japanese yen despite the interventions. All in all, the bias for the Japanese Yen remains bearish. USDJPY TECHNICAL ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can see that USDJPY is now trading around the key 158.00 resistance zone. This is where we can expect the sellers to step in with a defined risk above the resistance to position for a drop back into the major trendline. The buyers, on the other hand, will want to see the price breaking higher to pile in for a rally into the 162.00 handle next.USDJPY TECHNICAL ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, there’s not much we can add as the main levels remain the resistance zone around the 158.00 level and the major upward trendline. We might just range here until we get a breakout on either side. USDJPY TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, we have a minor support zone around the 156.50 level. If the price falls into it, we can expect the buyers to step in with a defined risk below the support to keep pushing into new highs. The sellers, on the other hand, will look for a break to increase the bearish bets into the major trendline. The red lines define the average daily range for today. UPCOMING CATALYSTSToday we get the US CPI report. Tomorrow, we have the US PPI data. On Thursday, we get the US Retail Sales report and the latest US Jobless Claims figures. This article was written by Giuseppe Dellamotta at investinglive.com.

Our mandate requires us to act if inflation expectations de-anchorData will determine ECB's decision in JuneBaseline included two rate hikesThe ECB has already signalled that a rate hike in June is coming unless the war ends and oil prices fall significantly before then, so I'm not sure why he places weight on the data.The economic data hasn't been screaming for the aggressive rate hikes the market has been pricing in. Right now, there are three hikes expected by year-end.Headline inflation did rise due to energy prices, but we also got a slowdown in economic activity. The latest ECB's SAFE survey showed rising inflation expectations in the short-term but no impact on the long-term outlook. Wage growth expectations have also moderated to 2.8% vs 3.1% in the prior quarter.For June, the market is pricing in an 88% probability of a rate hike, so that's basically a done deal. It's not 100% because there's still a chance that the war ends before then and once the Strait of Hormuz is reopened, oil prices will almost surely fall quickly. This article was written by Giuseppe Dellamotta at investinglive.com.

In very close contact with Japan's ministry of financeWe both believe forex volatility is undesirableJapan economic fundamentals are very strong and resilientThat will be reflected in the exchange rateHave great confidence in BOJ governor Ueda in guiding monetary policyMade no request to prime minister Takaichi regarding monetary policyDiscussed Trump's visit to Beijing with Takaichi as well as importance of US-Japan relationship in that regardThis doesn't really add much to his earlier comments here. His acknowledgement basically is a nod of approval to Japan's intervention actions in the past two weeks. However, he doesn't go as far as to commit to anything in saying that the US will be up for a joint intervention effort to help with the yen currency's plight.As mentioned before, it is a sensitive topic and one that the US is not likely to get on board with:"Is it about time that Japan tries to seek help from the US for joint intervention? It's a very touchy subject but given the circumstances and desperation, this might be one alternative.However, this starts to border on politics and it would need the US to acknowledge that the yen is being "mistreated" while also arguing that the dollar is "too strong". I just don't see that happening as it would require the US to take more of a dollar policy stance than being able to isolate it as a reaction to the yen and global market situation." This article was written by Justin Low at investinglive.com.

The ranges of estimates are important in terms of market reaction because when the actual data deviates from the expectations, it creates a surprise effect. Another important input in market's reaction is the distribution of forecasts.In fact, although we can have a range of estimates, most forecasts might be clustered on the upper bound of the range, so even if the data comes out inside the range of estimates but on the lower bound of the range, it can still create a surprise effect.CPI Y/Y3.9% (9%)3.8% (23%)3.7% (54%) - consensus3.6% (12%)3.3% (2%)CPI M/M0.9% (2%)0.8% (5%)0.7% (23%)0.6% (53%) - consensus0.5% (16%)0.4% (3%)Core CPI Y/Y2.9% (5%)2.8% (23%)2.7% (60%) - consensus2.6% (12%)Core CPI M/M0.5% (3%)0.4% (40%)0.3% (48%) - consensus0.2% (9%)Elevated energy prices have pushed headline inflation back above the 3.0% mark. Inflation was elevated before the war started though and this latest shock just added more upside risk. I don't think today's data is going to change much for the market unless we get significant deviations from the expected numbers.For context, the annual Core PCE rate (which is what the Fed targets) has been sticky near the 3.0% level since 2024 and recently rose to the highest level since December 2023. Also, let's not forget that the Fed has been missing its 2% target since 2021. Fed's Hammack recently said that there are concerns among businesses that an inflationary mindset is starting to become entrenched in people's minds.In the markets, it's been kind of consensus that the Fed has abandoned the 2% target and now focuses more on keeping it in a 2-3% range like the RBA. With such expectations it could be very hard to get inflation sustainably back to the 2% target without a more significant slowdown in the economy. The problem is that the Fed has been focusing more on the labour market and the soft landing, which had the side-effect of indirect financial easing through stock markets. This article was written by Giuseppe Dellamotta at investinglive.com.

The US-Iran conflict continues to drag on and at this stage, it looks like nothing will change for at least another week. After keeping somewhat steadier yesterday, markets are starting to run into a bit of nerves today as we see a more defensive risk posture take shape.Oil prices are climbing back up with WTI crude now up near 2% on the day and touching the $100 mark once more. This comes as the bond market continues to signal inflation worries with 30-year Treasury yields clipping the 5% mark again. The latter traded down to around 4.91% at one point last week but have been rather sticky as concerns continue to mount on the global inflation picture.Besides that, we're starting to see US futures also feel exhausted with S&P 500 futures dropping back by 0.4% on the day. That comes as tech shares lead the drop now, with Nasdaq futures down 0.6% currently.The signal from US futures is starting to reverberate more broadly and that's prompting risk trades to step back ahead of European trading.In the major currencies space, the dollar is leading gains across the board now as such. EUR/USD is down 0.3% to 1.1750 and GBP/USD down 0.4% to 1.3547 on the day. Meanwhile, AUD/USD is down 0.4% to 0.7215 and USD/JPY is up 0.2% to 157.45 after a brief drop to 156.75 earlier amid some volatile selling.As for precious metals, we're seeing gold down 0.8% to $4,696 and silver down 2.7% to $83.75 on the day.All signs point to a more risk-off mood amid a lack of fresh progress or optimistic headlines from US-Iran developments. As things stand, traffic along the Strait of Hormuz remains at a standstill with no clear timeline on when things will improve.Looking to the days ahead, US president Trump will be sidelined by his visit to China from tomorrow until Friday. So, that will keep markets on edge as the US-Iran conflict continues to rage on in the background.That being said, I wouldn't be surprised if Trump used the visit to tee up an opportunity to announce something like "China has agreed to help resolve situation with Iran.. BIG NEWS coming!!!". It would be very on-brand of Trump to do so and try to gas up the stock market again, even if China didn't quite give any confirmation.If that were to happen, one can reasonably expect China to just say something along the lines of "we agreed to try and step up mediation efforts to the Middle East situation". Yet, we will see Trump make a big deal out of it and markets will once again turn in hopes of something better to come. This article was written by Justin Low at investinglive.com.

EUROPEAN SESSIONIn the European session, the only highlight is the German ZEW index. The data is expected to show the third contraction in a row due to the situation in the Middle East and the Strait of Hormuz closure. The market-reaction will likely be muted given that it won't change anything for the ECB.AMERICAN SESSIONIn the American session, we get the US CPI report. Headline CPI Y/Y is expected at 3.7% vs 3.3% prior, while Core CPI Y/Y is seen at 2.7% vs 2.6% prior. Elevated energy prices have pushed headline inflation back above the 3.0% mark. Inflation was elevated before the war started though and this latest shock just added more upside risk.The annual Core PCE rate has been sticky near the 3.0% level since 2024 and recently rose to the highest level since December 2023. Also, let's not forget that the Fed has been missing its 2% target since 2021. Fed's Hammack recently said that there are concerns among businesses that an inflationary mindset is starting to become entrenched in people's minds. In the markets, it's been kind of consensus that the Fed has abandoned the 2% target and now focuses more on keeping it in a 2-3% range like the RBA.With such expectations it could be very hard to get inflation sustainably back to the 2% target without a more significant slowdown in the economy. The problem is that the Fed has been focusing more on the labour market and the soft landing, which had the side-effect of indirect financial easing through stock markets. CENTRAL BANK SPEAKERS10:00 GMT/06:00 ET - ECB's Dolenc (neutral - voter)17:00 GMT/13:00 ET - Fed's Goolsbee (neutral - non voter) This article was written by Giuseppe Dellamotta at investinglive.com.

Looking at the price action, I'm not very inclined to chalk this up to another intervention round. That being said, one can argue that with each intervention play that the effectiveness is slowly being diminished. After all, the signaling from Japan's ministry of finance last week wasn't the best considering the low liquidity environment.In any case, the pair just dipped from 157.70 to around 156.75 but is now trading back up to near 157.30 - more than halving the quick drop. From earlier: Japanese yen starting to slip away again, will Tokyo officials step in? This article was written by Justin Low at investinglive.com.

CPI +2.9% vs +2.9% y/y prelimPrior +2.7%HICP +2.9% vs +2.9% y/y prelimPrior +2.8%Core CPI +2.3% y/yPrior +2.5%Headline inflation pressures continue to tick higher in Europe's largest economy, largely due to a surge in energy prices. That comes as no surprise with it being part of the fallout from the US-Iran conflict. Of note, overall energy product prices in April 2026 were 10.1% higher than in April 2025. And even when compared to the previous month, there were up significantly (+7.2%).In particular, fuel prices saw a sharp increase within the year (+26.2%) but even household energy price spending also jumped up sharply with light heating oil seeing a surge of +55.1% within the year.The good news at least is that this is not quite translating to core prices just yet. In fact, core annual inflation ticked lower to 2.3% on the month. But the longer the US-Iran conflict drags on, higher energy prices will become more embedded in other parts of the inflation picture down the road. So, that's the real risk.Looking at the breakdown, food price inflation rose by a below average 1.2% estimate (previously 0.9%) while services inflation rose by 2.8% (previously 3.2%). The drops there are what led to core prices nudging a bit lower on the month in April. But as mentioned above, the major risk to the outlook will come from higher energy prices spilling over to other areas in due time. This article was written by Justin Low at investinglive.com.

There are just a couple of expiries to take note of on the day, as highlighted in bold below.They are for EUR/USD at the 1.1745-50 levels. These don't tie too much to any technical significance but they do sit in between key near-term technical levels. The 100 and 200-hour moving averages rest at 1.1758 and 1.1734 respectively. So, the expiries are placed in between that layer and perhaps may offer some pull in keeping price action more grounded in the session ahead.Dollar sentiment has been a little mixed to start the week with the 1.1800 mark still capping EUR/USD upside for now. And with US-Iran developments being dealt a setback, we're now seeing the dollar push up a little today. It's not much but it could keep EUR/USD locked closer to the expiries level before rolling off later in the day.That unless of course we get any headlines from the Middle East to shake things up. However, that is not likely for now as US president Trump is gearing up to prepare for his trip to Beijing tomorrow.As such, markets will be sidetracked a little as the US-Iran conflict continues to brew in the background. That remains the key risk for trading sentiment for the coming days regardless.For more information on how to use this data, you may refer to this post here. This article was written by Justin Low at investinglive.com.

Bessent comments on Twitter/X:"In my meeting with Minister @satsukikatayama , I was pleased to reaffirm the strong economic partnership between the United States and Japan. The level of communication and coordination between our teams in addressing undesirable, excess volatility in currency markets continues to be constant and robust. I congratulated the Minister on Japan’s strong economic resiliency, and we held positive discussions on the US-Japan investment agreement, our shared efforts on critical minerals, and the United States’ support for Japan as it works to build an investment screening mechanism."This builds on the takeaway from earlier in the day here.All in all, there isn't too much to gather from their meeting today. It's basically just the US acknowledging Japan's plight and giving the nod to recent intervention moves from Tokyo. There was no commitment from either side in getting Washington involved to do any joint intervention efforts.In the bigger picture, you can bet that Bessent probably dropped a subtle hint to Katayama so as to not take things too far when going at intervention alone. That might invite some political risks when it comes to the optics with the US needing to draw the line in labelling one of its closest allies as a 'currency manipulator'. This article was written by Justin Low at investinglive.com.

Japan is estimated to have spent over $60 billion in intervening in the market recently and they don't have very much to show for it. The intervention efforts since the start of May in particular have not bore much fruit, with traders pushing back quite swiftly after the fact. And following their latest attempt last week, we're starting to see more of the same again. USD/JPY is trading back up above the 157.00 level, as traders look to test the limits of Tokyo officials once more.The move higher comes despite a more mixed dollar, with broader markets still retaining some optimism over the US-Iran situation. While oil prices and bond yields are staying elevated, the dollar hasn't really made strides in the past week. So, one can definitely argue that the yen side of the equation is also doing the talking here.The fact of the matter remains that the fundamental factors in play right now are overwhelmingly bearish for the yen. And as the US-Iran conflict prolongs, the negative impact will just continue to drag on. There is a massive headwind for the Japanese economy, adding strain to both the financial and fiscal sides. Not only that, it also complicates the BOJ outlook amid cost-push inflation being put into the mix.We have covered those factors time and time again, and they continue to stick along with the Takaichi trade running in the background.So, will we see Japan's ministry of finance decide to come back into the market again?The meeting between Bessent and Katayama today looks to be one for the optics more than anything else. However, it would be safe to assume that Bessent will also have delivered a subtle suggestion to Tokyo so as to not overdo it in terms of intervening in the market. Besides that, the ministry of finance will also have to be wary of the IMF warning here.The issue for Japan now is that they have already shown their hand and the cards they want to play. Sure, they can tolerate a bit of pushback from the market after the recent intervention action. However, are they going to let USD/JPY run back up closer to 160? I doubt so. It would just look extremely bad and traders will punish them even more the next time around.That being said, it doesn't mean that Tokyo officials will find it easy to keep intervening in the near-term. Even outside of the fact of the IMF warning, their decision to intervene last week amid low liquidity conditions was arguably a poor choice of signaling. Yes, they might save some ammunition in doing so. However, the crux of the message might not hit markets as hard:"It might sound counter-intuitive to not want to act during low liquidity periods, but there's a certain nuance to it. The main thing about intervention isn't so much so as the money but more so about the signaling. You want enough players in the market to get that signal and amplify it, so as to get the idea that "we shouldn't mess with the MOF/BOJ". Otherwise, that signal can get lost in translation if there isn't enough liquidity follow through. And at the end of the day, it might just be passed off as more noise than an actual leading signal to traders."Now, they're left to clean up the mess from last week's efforts as the intervention play comes to naught. They perhaps might have the appetite to go big again for another one or two more times at best.But if traders keep pushing back, Japan's ministry of finance might be put in a tough spot on thinking about what to do next. From before:"Now, everyone knows that Tokyo has one of the biggest war chests in terms of foreign currency reserves. They have a whopping $1.2 trillion to work with. However, it is important to note that not all of this is in liquid cash deposits. In fact, over 80% of that are in securities which primarily consist of US Treasuries among other foreign government bonds.So, it is not to say that they have an "unlimited" tap to keep drinking from if they burn out their cash reserves. If that were to be the case, it's a tricky situation for the ministry of finance. If it were to come to that, selling Treasuries may have the unintended effect of pushing US yields higher and that is an indirect tailwind for the dollar instead. So, that sort of achieves the opposite effect of what Tokyo wants; that is for a lower USD/JPY.Of course, it's not as simple as that. However, all of this is part and parcel to the equation and it all adds up to how markets react at the end of the day. As such, that is something I reckon Tokyo officials will want to avoid for as long as they can." This article was written by Justin Low at investinglive.com.

What are investment banks expecting in US April inflation data? (It ain't pretty)Alphabet plans first yen bond sale to fund $190 billion AI spending pushRecap - Japan and US reaffirm currency cooperation after Bessent's Tokyo talksAustralian business confidence remains deeply pessimistic, -24 in April (prior -29)PBOC sets USD/ CNY central rate at 6.8426 (vs. estimate at 6.7945)Katayama says two-hour Bessent talks covered forex, critical minerals and AITrump weighs return to combat as Iran nuclear talks falter, CNN reportsTrump delays beef tariff cut after rancher and Republican pushbackBessent heads to Tokyo pressing Japan on yen weakness and interventionBOJ 'Summary" - Japan rate hike back on table as BOJ signals next move still likely upwardJapan March household spending fell 2.9% y/y (expected -1.5%, prior -1.8%)New Fed Chair Warsh could be locked in as soon as TuesdayUK consumer spending falls for first time since 2024 as Iran war bitesGoldman Sachs pushes Fed rate cut forecast to December 2026ICYMI - JPMorgan warns of $150 oil and 4% inflation as energy crisis deepensS&P 500 could hit 8,000 HSBC strategists sayThe latest Trump pump: US to loan 53.3 million barrels from Strategic Petroleum ReserveinvestingLive Americas FX news wrap 11 May: Markets stall as Iran tensions simmerUAE carried out covert strikes on Iran as Gulf war escalated, WSJ report saysAt a glance:Oil and the USD held firm as US-Iran pessimism deepened; Trump said the ceasefire is "on life support" on Monday, with CNN reporting he is now more seriously considering a return to major combat operations, frustrated by the Hormuz closure and stalled nuclear talksThe Bank of Japan held rates at its April meeting but its Summary of Opinions, published Tuesday, warned that upside inflation risks are rising, with several members flagging possible hikes as soon as the next meetingAustralian business confidence edged up to -24 in April from -29 in March but remained deeply negative, with conditions falling to their lowest since 2020 as energy costs squeezed margins, NAB data showedJapan and the US reaffirmed close coordination on currency markets, including intervention, after Finance Minister Katayama met Treasury Secretary Bessent in Tokyo; Bessent is expected to meet Prime Minister Takaichi before his visit concludes WednesdayJapan's Nikkei remained supported but South Korea's KOSPI pulled back sharply after touching an all-time high just below 8,000, as investors used Middle East uncertainty as a cue to book profitsOil and the US dollar held firm on Tuesday as sentiment over the US-Iran conflict darkened further. Trump described the ceasefire as on life support on Monday, and CNN reported that he is now more seriously weighing a return to major combat operations, frustrated by the continued closure of the Strait of Hormuz and the lack of meaningful progress in nuclear negotiations. His national security team met at the White House on Monday to review options, though a major decision is not expected before the president's departure for China.The Bank of Japan kept its policy rate unchanged at its April meeting, but the Summary of Opinions published on Tuesday struck a notably hawkish tone, with board members warning that upside inflation risks are growing as crude oil prices surge. Several members flagged the possibility of a rate hike as soon as the next meeting.In Australia, business confidence remained deeply depressed in April despite a marginal recovery to -24 from -29 in March, which had represented the second-largest monthly drop in the survey's history. Business conditions fell to their second-lowest reading since 2020, with capital expenditure recording its steepest post-COVID decline as energy costs bit hard into margins.In Tokyo, Finance Minister Katayama confirmed that Japan and the US reaffirmed close coordination on currency markets, including on intervention, following her meeting with Bessent. Both sides said Japan's recent yen-buying activity is consistent with a joint statement signed last September. Bessent is expected to meet Prime Minister Takaichi before leaving for Seoul on Wednesday. Equity markets were mixed, with Japan's Nikkei holding up while South Korea's KOSPI retreated sharply after briefly touching an all-time high just below 8,000, as investors took the heightening Middle East uncertainty as a cue to lock in gains, and a South Korean official suggested citizens should receive an “AI dividend” funded by taxes on AI-related profits.Coming up:The US April CPI report is due at 1230 GMT / 0830 Eastern, and will be closely watched given the inflation pressures building across major economies. Via the Wall Street Journal , what's expected:At 1130 Eastern the Senate is expected to vote to confirm Kevin Warsh as a Federal Reserve governor for a 14-year term, setting up a second vote on his nomination as Fed chair likely on Wednesday.Australia is expected to report a narrower than forecast budget deficit this evening, banking commodity-driven revenue windfalls, alongside the most significant property tax reforms the country has seen in decades.Later this week, Trump arrives in Beijing on Wednesday. On Thursday, he participates in a greeting with President Xi Jinping at 10:00am local time, followed by a bilateral meeting at 10:15am and a State Banquet at 6:00pm. Friday's schedule includes a Friendship Photo at 11:30am, a Bilateral Tea at 11:40am and a working lunch at 12:15pm. This article was written by Eamonn Sheridan at investinglive.com.

Incoming Fed Chair Warsh is going to be facing well above target inflation.Wall Street Journal Fed watcher Nick Timiraos reports on expectations: This article was written by Eamonn Sheridan at investinglive.com.