What the markets have not priced into the US CPI data today- a firmer dollar index

As the dollar edges lower versus the European currencies so far today, but holds its own versus the Yen, the risk backdrop looks very positive for stocks. I have already covered the price action across the European and US futures this morning and it looks like new records are there to be set in some of those markets. Of course the fly in the ointment on all this would be a stronger set of US CPI inflation data this afternoon. However, that is not what the markets are clearly anticipating. So, let me look at what is currently expected for that CPI data. The median forecast is for December CPI to rise by 0.2% on the month, from a previous 0.1% gain. The annualised reading is forecast to  be running at 3.2%, compared to 3.1% in November. The core monthly rate is forecast to remain unchanged at +0.3%, but the annualised core rate is expected to drop back to 3.8%, from 4%. Anything north of those forecasts is going to ask some questions regarding the timing of the first Fed rate cut in 2024. I would suggest that anything above 0.5% in the core monthly rate and above 4.2% in the annualised rate will ask some serious questions for the US stock markets and kick the dollar higher too. Of course we shall have to see what emerges here later. Meantime, the dollar index (USDX) is lower and still within the range outlined previously here (102-103), but towards the lower end of that right now. The index closed last night at 102.36. It has fallen a little more today, with the low seen at 102.17. The high seen so far has been set at 102.30. It is currently trading at 102.20