The Euro could certainly benefit somewhat today if the national inflation figures surprise to the upside. That would be a clear sign that we will see higher numbers on Friday as well. But I want to make a quite different point. Namely, the Euro is unlikely to benefit as much from the same surprise as the USD from the PCE deflator.

Today's national inflation numbers will have to surprise much more to the upside than the PCE deflator for the market's interest rate expectations to move similarly sharply. As I said, the Euro should also benefit from higher numbers, but not quite as much as the Dollar in the event of similar surprises.