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Markets In holding Pattern Ahead Of Key US Inflation Release

EMERGING MARKETS
  • Core fixed income has been moving higher through this morning as terminal rate expectations have shifted lower after comments from ECB's Holzmann which were considered less hawkish than his usual communication.
  • Currency markets have picked up where they left off early Wednesday, with risk proxies moderately outperforming and EUR/USD holding well above the 1.07 handle.
  • Markets remain in a holding pattern ahead of Thursday's US CPI release, with Wednesday seeing very little in terms of data. As such, more attention will likely be paid to the speaker slate, as ECB's Villeroy, Rehn and de Cos are all on the docket.
  • Following Mexico’s production data and Brazilian retail sales, there are no further major Latin American data releases.

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