Have the markets overreacted to the CPI data? Check out EUR/USD right now

As you can see there has been some hefty moves in the US stock futures and the dollar has come a cropper following the slightly benign US CPI report. However, I think it is important to get all this in context. The monthly core rate was as expected, at 0.2%. The non-core was actually higher, at 0.4% (0.3% expected) and the annualised non-core rate did rise to 2.9% from 2.7%, as was expected. Granted the core annualised rate did edge just 0.1% lower, but what is that amongst friends? Well, not much of a miss at all really. So, there is an argument to suggest the markets have overreacted to this data and what seems to have happened; is just a good excuse for the dollar bears and stock market bulls to come out to play. The EUR/USD is perhaps a good barometer of that contrarian view right now. It did rise on the news, but only just above 1.0350. It is now tracking lower again. It will also be interesting to see how the US cash equity markets react to the charge higher in the futures shortly. The EUR/USD is right now at 1.0333