• The US Dollar trades around a three-month high. 
• Market is trying to digest the recent US CPI report which messed up the expected time table on Fed rate cuts. 
• The US Dollar Index seems to be stalling ahead of 105 and seeing some profit taking. 

The US Dollar (USD) is throwing a few good punches at the markets with a substantial rally midweek. The move comes on the back of surprise upticks in US monthly inflation (both headline and core). This in turn is triggering an earthquake in markets, which has sent equities nosediving, yields soaring and the US Dollar rallying against every major currency peer.

On the economic data front, a very light calendar offers room for markets to digest and recalibrate. Do not expect much from any single economic data point ahead this Wednesday with the Mortgage Applications Survey. Rather look for clues from US Federal Reserve members Austan Goolsbee and Michael Barr, who are speaking today and could soften the current inflation print with a nuanced message.