All’s well that ends well. US inflation came in line with expectations yesterday; core CPI fell for the first time in six months and the monthly CPI figure was a bit lower than expected. Cherry on top, retail sales stagnated in April and came to cement the idea that the US economy could be finally slowing. The combination of slowing growth and softer inflation is a godsend for equity markets who needed this boost; there is nothing more appetizing for investors than the smell of lower future rates. The US yields fell, equities rallied and the USD depreciated. While the dollar’s depreciation is more than welcome for the other central banks – because it reinforced the rate cut expectations there, as well – the rally in major currencies could remain limited against the US dollar given the Fed members’ cautious approach to the rate cuts before they are sure inflation is on a solid path to their 2% target. In metals and commodities, yesterday’s satisfactory US inflation data keeps the perspective of major central bank rate cuts wide-open and supports the continuation of the reflation trade that’s supportive of oil and copper. Listen to find out more!