2024 started with a steady stream of stronger-than-expected US data, but last week was, overall, more mixed. 

Core CPI inflation held steady at 3.9% and core PPI inflation rose to 2% from 1.7%, but soft retail sales are the first demand-side data point to underwhelm this year. That’s helped EUR/USD hold above 1.0700 and prevented the Dollar Index from breaking 105.00, and dragged 2-year Note yields back down from a peak above 4.7%.

This week’s UAS data calendar is light with the Philadelphia non-manufacturing index, FOMC Minutes, Chicago Fed index, claims and existing home sales due. That tends to argue for rangey rates, which suggests DXY may find itself capped around 105.00 now.