Geopolitics Trump Inflation Fears Ahead of US CPI Release

The focus of financial markets is currently on geopolitics and inflation as investors await the US CPI release on Wednesday.

Last week's poor payroll numbers had a dovish impact on US rates, but the CPI figure this week could be more instrumental in shaping market expectations.

The Fed's next move remains uncertain, with around 40% of a hike priced in, and markets are still trying to make up their minds about the central bank's intentions.

A benign CPI reading could ease fears that Fed Chair Kevin Warsh is turning the central bank overly dovish, which would bring longer rates lower as well.