Sterling and the greenback remain near the bottom of the forex majors league standings today following US and UK inflation reports. Both countries saw headline inflation flat, while core inflation remained steady (for the UK) or increased (for the US) in the 1.25%-1.75% range. The USD tried to pop on the US report but this quickly ended in tears for the bulls. Overall, the market reaction indicates that speculation on interest rate increases in both countries continues to unwind, although the inflation data also suggests traders should not expect either central bank to consider renewed stimulus. The USD correction has enabled other currencies to rebound, but there has been differing performance within groups. For example, CHF is outperforming gold and JPY among defensives, EUR is outperforming GBP, AUD is outperforming NZD and NOK is outperforming CAD even though WTI is up 2% today and closing the spread on Brent. Flash manufacturing reports are out today and have been mixed. China was the weakest falling back under 50 into contraction territory and Japan’s was nothing to write home about either. European numbers were mixed with Germany doing a bit better than France. Stock markets are holding steady this morning with the Dow just above 18,000 and the Dax below 12,000. Later this morning, we could see some activity around the US flash PMI and new home sales reports. Corporate News There are no major corporate announcements this morning. Economic News Economic reports released overnight and this morning include: China interest rate PBOC cuts 7-day reverse repo rate to 3.55% from 3.65% US consumer prices 0.0% vs street (0.1%) US CPI ex food and energy 1.7% as expected vs previous 1.6% US FHFA house prices street 0.6% UK consumer prices 0.0% vs street 0.1% UK core CPI 1.2% vs street 1.3% UK retail prices 1.0% vs street 0.9% UK producer input prices (13.5%) vs street (12.3%) UK producer output prices (1.8%) vs street (2.0%) UK ONS house prices 8.4% vs street 8.9% Japan flash manuf PMI 50.4 vs street 52.0 China flash manuf PMI 49.2 vs street 50.5 France flash manuf PMI 48.2 vs street 48.5 France flash service PMI 52.8 vs street 52.5 Germany flash manuf PMI 52.4 vs street 51.5 Germany flash service PMI 55.3 vs street 55.0 Australia leading index 0.4% unchanged Economic reports due later today include: 9:45 am EDT US flash manufacturing PMI street 54.6 10:00 am EDT US new home sales street 465K