Dow Jones futures in the red this morning with US CPI very much on the radar

The Dow Jones was by some margin the best performing major US stock market yesterday. The index gained 0.28%. That compared to a 0.29% fall in the Nasdaq 100, which consequently stifled the S+P 500 into making virtually no progress at all. The Dow closed 123 points higher, at 44,593. However, despite the fresh records seen in the DAX and the FTSE 100 today, the Dow Jones futures are in the red right now, currently pricing the opening around 44,515. It seems the index might not be taking any chances with the very important US CPI release due later. So, let me have a look at what is expected. The monthly reading of the Consumer Price index is expected to rise by 0.3% in January, compared to a 0.4% rise in December. The annualised rate is forecast to remain unchanged at 2.9%. The core annualised rate is forecast to rise by 3.1%, from 3.2% in December. The markets are going to move on this data, but by how much clearly depends on what the data delivers. A Higher than forecast rate of inflation will support the dollar, drive treasury yields higher and surely dent stocks. The opposite applies too. It is the core annualised rate that is likely to attract the most attention. It will be interesting to see, if this data supports the Fed view, that there is clearly no rush to cut interest rates just now.