Canadian CPI (inflation) data ticked higher yesterday in all its metrics, suggesting advanced economy inflation is proving to be a bit sticky as it nears its target range.

1. Canadian CPI data released yesterday showed inflation ticking unexpectedly higher, but not by a great deal. Month-on-month inflation rose from -0.4% to 0.4%, causing annualized Median CPI to rise from 2.3% to 2.5%, when a rate of 2.4% was expected. This has helped boost the Canadian Dollar over recent hours, notably threatening to break to a long-term high against the weak Japanese Yen in the CAD/JPY currency cross.
2. The cryptocurrency Bitcoin has consolidated since making a fresh record high above $93,000 yesterday, and the price action right now indicates a further bullish breakout is looking very likely to happen at any moment. The obvious target is the big round number at $100,000. Trend and momentum traders will be interested in staying long of Bitcoin, which can be traded as spot Bitcoin, as CFDs, as futures (there is a micro future on the CME which is sized at only 10% of a coin), or as options.
3. Stock markets are mostly gaining firmly, with several major indices gaining ground over the past day, notably the NASDAQ 100 and the S&P 500.
4. In the Forex market, the US Dollar is still losing ground after reaching a new 1-year high price last week. Like Bitcoin, the Dollar had also been driven higher by the Trump victory, but there is an increasing feeling that this rally may have run out of steam. Riskier assets have been rebounding. Since today’s Tokyo open, the strongest major currency has been the British Pound, while the Japanese Yen has been the weakest.
5. There will be a release today of UK CPI (inflation) data, which is expected to show an increase in the annualized rate from 1.7% to 2.2%. A significant variation from that will probably trigger volatility in the British Pound.

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