Easter Algos Dump Dollar After Dour Data Deluge

Earlier this morning the reflation narrative rolled over and died.

That’s not just our dour assessment. Look around. The other folks who know what they’re talking about said exactly the same thing we did. Namely, that when it comes to the global reflation meme, the following is “bigly” bad…

CoreCPI

As a reminder, this comes on the heels of Trump’s WSJ interview (earlier this week) in which the President did his best Erdogan impression by explaining how he really, really likes low rates (even though he said something entirely different last September) and reiterated that the dollar is “too damn strong.”

Add it all up and what do you get? Well, you get still more fuel on the fire in terms of the Treasury rally and a stronger yen.

Sure enough, via Bloomberg…

The dollar declined after U.S. inflation in March missed estimates, raising doubts about sustainability of global reflation trade. Cost of living in the U.S., as measured by consumer-price index, fell in March for first time since Feb 2016, showing inflation is moving up only gradually, Labor Department report showed Friday. USD/JPY extends decline, falling 0.3% to 108.76.

Here’s what that looks like:

Data

USDJPY

Meanwhile, the euro jumped to near session highs:

EurUSD

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