US inflation data lands today, with the dollar pushing higher, gold rising and the Nasdaq vulnerable to sharp moves.
Traders stepped back from risk on Friday ahead of the January US Consumer Price Index (CPI) release, with moves already visible across currencies, commodities and equities. The January CPI report is scheduled for release at 13:30 GMT.
The dollar edged higher during European trading. Gold recovered from recent lows. US equity futures drifted lower, led by technology stocks. Markets have been unsettled all week. Today’s inflation reading is expected to set the tone for the remainder of February. For ongoing coverage of major macro events and asset moves, visit our latest market news updates.
Dollar Strength Builds Before Release
The US dollar firmed against major peers in early trading. Sterling slipped and the euro traded cautiously, whilst the yen attracted modest demand.
Currency desks reported lighter positioning rather than aggressive conviction. Many short-term traders reduced exposure before the data, wary of sharp reversals once the figure prints.
Rate expectations remain sensitive. A stronger inflation reading would complicate assumptions of steady disinflation and could push interest-rate cut bets further into the year. A softer number would likely ease pressure on risk assets and weaken the dollar.
Treasury Yields Hold Elevated Levels
US Treasury yields stayed close to recent highs, reflecting uncertainty over the Federal Reserve’s path.
The two-year yield, closely tied to policy expectations, has seen increased options activity this week, suggesting traders are hedging for a sizeable move. Liquidity typically thins around major data releases, increasing the risk of exaggerated price swings in the minutes following publication. During high-impact releases such as CPI, traders often see spreads widen sharply, particularly in major currency pairs.
Technology Stocks Under Pressure
Equity markets entered the session on uneven footing. US futures signalled early weakness, with technology shares again bearing the brunt of selling.
The Nasdaq has struggled to extend its late-2025 rally. Profit-taking in large-cap names and renewed questions over valuation levels have made the index more vulnerable to macro shocks. Broader benchmarks have shown relative resilience, supported by rotation into financial and energy stocks. Still, sentiment remains fragile.
Gold Recovers as Caution Rises
Gold moved higher during morning trade, reversing part of this week’s decline. Markets tightened ahead of the US inflation release on Friday, with traders adjusting positions across currencies, commodities and equities hours before the data hit.
The dollar climbed in early trade. Gold bounced sharply. US index futures slipped, led by renewed selling in technology shares. The mood was cautious, but restless.
Dollar Buyers Step In
The US dollar gained ground against the sterling and euro during the European session, reflecting defensive positioning before the CPI print.
Short-term traders trimmed exposure rather than take fresh bets. The risk of a sudden swing once the numbers land kept volumes measured but tense.
Any upside surprise in inflation could lift the dollar further and put renewed pressure on rate-sensitive assets. A softer reading would likely unwind some of this positioning quickly.
Yields Stay Elevated
US Treasury yields hovered near recent highs, keeping equity markets uneasy. The two-year yield, closely watched for policy signals, remained firm, showing that traders are not fully convinced inflation has cooled enough to clear the path for easy rate cuts. Volatility markets suggest the reaction could be sharp.
Nasdaq Struggles to Find Footing
Equity futures pointed lower before Wall Street opened, with technology stocks again under strain. The Nasdaq has lost momentum after its late-2025 rally, and traders are increasingly sensitive to valuation risk in large-cap names. Even modest macro surprises have triggered outsized moves this month.
Financials and energy shares have shown relative strength, hinting at quiet rotation beneath the surface. Still, sentiment remains fragile.
Gold Rebounds as Traders Hedge
Gold rose during the morning session, reversing part of this week’s decline. The move appeared to be driven by a short covering and defensive demand ahead of the data release. The metal remains closely tied to real yields and dollar strength, meaning any post-CPI shift could extend or quickly erase today’s gains.
Silver followed higher, though with less momentum.
Capital Drifts Beyond the US
Recent fund flow data shows money moving into European and Asian equities, while US equity funds have seen withdrawals. This rotation reflects caution around heavy concentration in American mega-caps and a broader search for diversification. Inflation data later today may accelerate that trend, or reverse it.
All Eyes on the Print
Major inflation releases often deliver immediate cross-asset repricing. Algorithms and leveraged trades can amplify the first move, creating sharp intraday swings.
Traders are watching nearby technical levels in the dollar index, gold and the Nasdaq. Breaks in either direction could draw momentum flows quickly. By the close, markets are likely to have chosen a direction.
For now, positioning remains tight and nerves are evident. Today’s inflation reading will decide whether February regains momentum, or turns more defensive.
Capital Rotates Beyond the US
Recent fund flow data shows investors reallocating capital toward European and Asian equities, while US equity funds recorded outflows earlier this week.
The shift reflects growing caution around concentration risk in US mega-caps and a broader reassessment of regional opportunities.
Session Likely to Set February Tone
Inflation releases often trigger immediate repricing across currencies, equities, bonds and commodities. Algorithmic trading and leveraged positioning can amplify initial reactions.
Traders are watching key levels in the dollar index, gold and the Nasdaq. Breaks beyond recent highs or lows could prompt momentum-driven flows. By the end of the session, markets will have clearer direction. Today’s inflation figure will shape how February trading develops.
