Tomorrow's CPI is not so cut and dry.
This isn't so much a contrarian view as it is a study of the dynamics taking place in the markets prior to the CPI release.
Most obvious of which is the fact that bonds have developed the penchant for persistent weakness irrespective of economic data. All this is taking place, by the way, as numerous inflation gauges tell us that inflation is, at least temporarily, a relic of years past.
Even in the days leading up to the CPI release, when you would expect bond shorts to cover some of their exposure ahead of the data tomorrow morning, not a peep. They are simply sitting tight with yields steadily moving up over the past several trading days into the report.
It is strange, to say the least.
It is easy to be dismissive of this signal, expecting that "bond investors will get it, don't worry."
When taking into account that we are witnessing this type of rate divergence, paired with the NDX hitting a key resistance level at 18000 that I have been discussing for weeks now, promptly reversing today's gain right off of resistance, then you should expect market shenanigans are around the corner.
We have taken preventive measures so as to be much less exposed to any shenanigans moving forward.
The second half of February deserves some caution.
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