Yesterday the post-election rally took a pause with US equity markets pulling back modestly. Treasury yields had resumed the recent move higher while the USD index also hit its highest level since May ahead of today’s CPI report. Overnight global equity markets traded to the downside while US futures also traded modestly lower. This morning’s CPI data was spot on with estimates with headline up 0.2% m.m while core was up 0.3%. There had been some concern ahead of this release given the recent move in Treasury yields and there was an immediate sigh of relief following the data which had pushed yields lower across the curve. The yield curve is re-steepening with the 2yr yield down 7bps, however the long end of the curve has reversed the earlier move lower moving modestly higher as is the USD. Equity futures reversed the overnight losses with the S&P 500 opening around unchanged while small/mid-cap indices were the biggest beneficiaries of the move lower in yields with the Russell 2k trading up ~1% at the open. As the long end has turned higher we’ve seen that dynamic begin to reverse.