Overnight events and price action: CPI's firmer headline was the catalyst - ANZ

Analysts at ANZ noted the overnight events and price action.

Key quotes:

"Some recent correlations in markets broke down overnight with the higher CPI print causing yields to increase, however equites erased a knee-jerk drop to trade higher.

The USD fell and gold spiked.

All eyes were on CPI with a firmer headline and core print driving significant market moves.

US treasuries traded immediately higher and have not retraced. The 2 year is up 6bps to 2.16% and 10 year rose 7bps to 2.90%.

Yield moves in Europe were muted. US equity futures were sharply lower following the CPI print, but quickly rebounded on the open and have trended in positive territory.

S&P is up 0.5%, with Dow relatively unchanged. European bourses rebounded in tow with Euro Stoxx 50 up 0.9% and DAX up 1.2%.

The USD reacted negatively to the data, with NZD leading gains in the G10. Gold spiked on the inflation data, up 1.3% to $1350/oz.

Oil climbed after EIA suggested a smaller inventory build than the bearish API report."

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