This week is all about key US economic data releases. And after the non-farm payrolls data yesterday, we’re not quite done yet as the consumer price inflation (CPI) report is what will bookend the week tomorrow. It’s a rare week in markets where we get a trifecta of big data from the US, but it is what it is.So, what can we make of the US CPI report to come on Friday?After the government shutdown in the fall, we should continue to see the distortions tied to that fade further with the latest report in January here. As a reminder, the brief shutdown in early February is not one to affect data collection so that won’t factor into play this time around.For the better part of 2025, markets have been focused on looking for the impact of tariffs passthrough on prices. And to be fair, that has been rather limited even if there is evidence of it continuing to show up in the data. To put it more cleanly, tariffs haven’t been as impactful in driving up price pressures as markets had anticipated.That being said, we are still likely to see more of that this time around again. As long as that continues to show up in core goods prices, it will be tough for the Fed to completely ignore that.As always, the focus will stay on core prices when taking in the report as a whole. And if the annual estimate continues to keep in the middle range between 2% to 3%, it will be tough to see the Fed taking on a much more dovish stance than what they are sticking with currently.Wells Fargo notes that:”Although last January’s jump in prices will likely lead the updated factors to “expect” some early‑year strength, we are concerned that the pandemic period is still causing seasonal distortions in the data. Against that backdrop, we look for core CPI to rise 0.33% month-over-month in January, about 10 bps stronger than its average pace 2025. Delayed pass‑through of tariff costs is likely to underpin firmer core goods prices, while we anticipate a moderate boost to services inflation.”Adding that:”While both headline and core CPI should edge lower on a year‑over‑year basis in January, we do not expect much further cooling over the course of 2026 as easier fiscal and monetary policy lend some support to demand.”Meanwhile, RBC is out saying that:”Headline US price growth likely slowed in January, driven by a 3% seasonally adjusted pullback in gasoline prices from December. But, we look for core price growth to remain unchanged at 2.6% – stretching readings above the Fed’s 2% inflation target to almost five years.Tariff passthrough to consumer prices has been limited so far, but business surveys continue to flag further increases in the pipeline, and core producer price inflation continues to run well above consumer price growth (3.5% in December).We look for food inflation to hold close to 3%. Measured year-over-year shelter inflation is still above 3% despite being lowered in November and December by a methodological quirk due to the US government shutdown in October that should reverse by April.”Lastly, here is Goldman Sachs’ estimates for the report:”We expect a 0.33% increase in January core CPI (vs. +0.3% consensus), corresponding to a year-over-year rate of 2.52% (vs +2.5% consensus). We expect a 0.24% increase in headline CPI (vs. +0.3% consensus), reflecting higher food (+0.45%) but lower energy (-1.3%) prices. Our forecast is consistent with a 0.31% increase in core PCE in January.” This article was written by Justin Low at investinglive.com. 🔗 Source 💡 DMK Insight This week’s trifecta of US economic data is a big deal for traders looking for direction. With the non-farm payrolls already in, the upcoming CPI report could set the tone for market sentiment. If inflation comes in hotter than expected, we might see a spike in volatility, particularly in forex pairs like USD/EUR and commodities. Traders should keep an eye on the 2% inflation target; a significant deviation could trigger aggressive moves. Also, watch for how institutional players react—if they start hedging against inflation, it could signal a shift in market dynamics. The real story is how these data points interact; they’re not just numbers but indicators of economic health that can influence Fed policy and interest rates. So, don’t just focus on the headlines—look for the underlying trends and adjust your strategies accordingly. 📮 Takeaway Monitor the CPI report closely; a surprise could lead to significant volatility in USD pairs and commodities, especially if inflation deviates from the 2% target.

FUNDAMENTAL OVERVIEWUSD:The US Dollar spiked higher yesterday following a strong US NFP report as the market pared back slightly Fed rate cut bets but surprisingly gave back all the gains. Maybe the market is still too convinced of more labour market weakness to come, or it decided to wait for the US CPI. Whatever the reason, the data since the start of the year has been clearly pointing to improving conditions that do not justify further rate cuts. The focus now turns to the US CPI report coming up tomorrow. If we get hot data, I can’t see how the market could brush that off like it did with the NFP. The hawkish repricing will likely be more substantial and trigger a more sustained rally in the greenback. On the other hand, soft data shouldn’t change much in terms of market pricing but could keep the dollar under pressure. EUR:On the EUR side, nothing has changed. As a reminder, the ECB held interest rates steady as widely expected at the last meeting and kept the same data-dependent and meeting-by-meeting guidance. The policymakers have eased the rhetoric on the euro recently after the currency dropped below the 1.20 level against the dollar. Even ECB’s de Guindos, who was the first to draw a line in the sand at 1.20, played down the surge in January as “not dramatic”. The focus remains on inflation as the central bank has repeatedly stated that it won’t respond to small or short-term deviations from the 2% target. If we start to see softer data, traders might start to price in some probabilities of a rate cut some time in the second half of 2026.EURUSD TECHNICAL ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can see that EURUSD is consolidating around the 1.19 handle as traders await the US CPI report. If the price falls back to the 1.1768 low, we can expect the buyers to step in with a defined risk below the low to position for a rally into the 1.21 handle. The sellers, on the other hand, will look for a break lower to extend the drop into the 1.16 handle next.EURUSD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we can see the rangebound price action between the 1.1830 support and the 1.1910 resistance. Traders will likely continue to play the range until we get a breakout on either side, which will likely be triggered by the US CPI report tomorrow.EURUSD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, there’s not much else we can add here as the consolidation will likely persist until the US CPI unless we get a very big deviation in today’s Jobless Claims data. The red line define the average daily range for today. UPCOMING CATALYSTSToday we get the US Jobless Claims figures, while tomorrow we conclude the week with the Eurozone Q4 GDP and the US CPI report. This article was written by Giuseppe Dellamotta at investinglive.com. 🔗 Source 💡 DMK Insight The US Dollar’s recent spike post-NFP report shows traders’ uncertainty about future rate cuts. Despite an initial rally, the dollar retraced its gains, indicating that market participants might be skeptical about the strength of the labor market. This hesitation could stem from fears of upcoming economic weakness, which suggests that traders should keep a close eye on upcoming economic indicators. If the dollar continues to struggle, it could impact correlated assets like commodities and equities, particularly those sensitive to currency fluctuations. For those trading USD pairs, watch for key resistance levels that could signal a reversal or continuation of this trend. The market’s reaction to the next set of labor data will be crucial; a weak report could reignite rate cut speculation, while a strong one might solidify the dollar’s position. In the short term, focus on the 1.05 level for the DXY index as a potential pivot point, and be prepared for volatility as traders react to fresh data. 📮 Takeaway Watch the 1.05 level on the DXY index; a break could signal further dollar weakness or strength depending on upcoming labor data.

The report says ahead of Trump’s visit to China in April, the US administration is putting on ice a number of key tech security measures that are targeted at Beijing. The sources say that Washington does not want to kick up a fuss, after having already seen a trade detente between Trump and Xi back in October last year.The measures that are reportedly shelved include a ban on China Telecom’s operations in the US as well as restrictions on sales of Chinese tech equipment for US data centers. Besides that, a proposal to ban domestic sales of routers made by TP-Link and another measure that would bar sales of Chinese electric trucks and buses in the US have all been put on hold in the meantime.Reuters notes that these are decisions that have not previously been reported.As a reminder, the US administration had before this pushed forward with these key tech curbs against China on the pretext of “national security”. That as the US claims China has been exploiting sensitive US data for blackmail and intellectual property theft in the past.While preserving positive relations ahead of Trump’s visit to China looks to be the main goal, two sources do note that the US administration focus in recent months have shifted to policing foreign tech threats related to Iran and Russia instead. That especially after the October trade truce with China was struck.That’s not all too surprising to be honest. Trump has a knack for switching his attention to other countries/foreign matters when he feels he has accomplished something already. And in this instance, it is clear that he does not want to shake things up before he gets the chance to put on another show when he makes his way to Beijing in April.If anything, this does at least tell us that there should not be any major bust ups between the US and China over the next two months.That being said, China was cunning enough to engineer some leverage with rare earth minerals before the October meeting between Trump and Xi. You have to wonder if they will try and pocket another ace up their sleeve before the next one in April. This article was written by Justin Low at investinglive.com. 🔗 Source 💡 DMK Insight The US pausing tech security measures against China is a big deal for markets right now. This move signals a potential easing of tensions, which could boost tech stocks and related sectors. Traders should keep an eye on how this affects companies like Apple and Nvidia, which have significant exposure to China. If the trade detente continues, we might see a rally in these stocks, especially if they break above key resistance levels. But there’s a flip side—if tensions flare up again, expect volatility. Watch for any statements from the administration that could shift sentiment quickly. Overall, this is a moment to assess your positions in tech and related markets, as the geopolitical landscape can change fast. 📮 Takeaway Monitor tech stocks like Apple and Nvidia for potential rallies if US-China tensions ease further; key resistance levels are crucial to watch.