Reality Distortion Field In Full Effect All Day

Premarket isn't real. The immediate reaction to CPI won't be real. Wen Real?

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Inflation Prints At 0830 Eastern

Then we will see how the market responds.  For the longer-term outlook, at this point nothing has changed from our note of yesterday - all the indices are pointing up. Below we post four simple charts showing where the futures stand at the time of writing (~0715 Eastern).  

The key message is simple:  the market is expecting inflation to soften and the Fed to follow suit.  Every index is straining at the leash to move up.  That means that if inflation comes in hot, there is significant short-term risk to the downside.  

Here's the four indices, using futures data so we can include data from the Globex session.