The Precise Take – Markets calm after flat CPI

Leaders Analysis:  The leaders threw us a big curve yesterday, but correlations appear to have righted overnight, with the EuroYen and ES falling, then rising in synch, and the US Dollar Index following inversely as well.  With the EuroYen at support and the Dollar at resistance, the leaders are equities neutral for today.

Medium Term Analysis:  CPI was a non-event this morning, so focus will be on tomorrow’s quadruple witching options expiration.  Next week is news-light until Friday’s preliminary GDP for Q4 2010, though there are some large Treasury auctions in the middle of the week.  The latter is notable because the only stumble in the equities rally that began in February was concurrent with the same auctions in the final week of February.  Besides being overbought, there’s really nothing else…

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