BUZZ-COMMENT-US CPI risks lean towards a stronger print

Feb 10 (Reuters) - While U.S. tariff updates continue to grab the headlines, market moves have been somewhat contained which gives the impression that we may be seeing tariff fatigue setting in. Despite this, however, the impact should continue to favour a stronger dollar and yen on the crosses more broadly.

Aside from U.S. policy, market attention will be placed on the upcoming CPI report, even more so after recent hot wage figures in the payrolls data. Looking at the data, risks lean towards a stronger print.

The sum of prices paid components for January, which combines the Dallas Fed, Empire State and Philly Fed manufacturing figures as well as ISM services and manufacturing data, showed a rise of 17.1.

Going back to 2015 using this metric and setting the parameter at above 15, the results show the following.

CPI Y/Y surprised on the topside of expectations 13 out of 23 times. Both downside surprises and in-line prints occurred five times each.

The seasonal drift also suggests that a stronger print versus expectations is more likely than not. Looking back to 2007, CPI Y/Y surprises for the January period are as follows;

topside 11 times, downside five times and in-line twice.

With this in mind, demand for dollar is likely to persist in the near-term, which should see dips remain shallow.

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