The US PPI will be released at 8:30 AM ET. It comes a day after the CPI which came in touch weaker than expectations of 0.2% versus 0.3% for both the headline and the core measures. For the PPI is expected and 0.3% MoM with the year on year at 3.3% versus 3.5%. The core is expected at 0.3% with YoY at 3.5% versus 3.6% last month.

The weekly initial jobless claims will also be released. Recall from last week the claims declined from 242K to 221K. The expectations are for a modest rise to 225K.

Later today at 1 PM, the treasury will auction off 30 year bonds to complete the coupon auctions for the week.

Looking at the 3 major currency pairs - the EURUSD, and USDJPY.

• The EURUSD Is lower by about -0.20% at the start of the US session. Looking at the 4-hour chart, the price this week stalled in a swing area between 1.0936 to 1.0954. The high reached 1.0946. Today, the price fell below a swing area near 1.08725. The problem technically is the momentum lower has seen up and down price action around that area. The 100-hour MA is near that level too at 1.0873. Although the price has seen up and down around that level, it remains a level to eye by buyers and sellers today. The broken 61.8% of the move down from September is the target at 1.08174.

• USDJPY: Looking at the 4-hour chart belwo the price high reached yesterday extended above a swing area between 148.56 and 148.72. But could not extend above the falling 100 bar moving average on the 4-hour chart. That level currently comes at 149.156. The price rotated back lower yesterday, and in trading today has move down to a low of 147.57

Looking at the hourly chart, the price low today did briefly break below its 100 hour moving average currently at 147.70, but as rotated back higher. The 200 hour moving average comes in at 148.336. With the price between the 100 and 200 hour moving averages, those levels will be the barometer for more bullish or more bearish. Move above the 200 hour moving average is more bullish at 148.336. Move below the 100 hour moving average of 147.700 would be more bearish in the short term.

As a review, geopolilically, the art of the deal from the Russian side had Kremlin aide Ushakov dismiss the proposed ceasefire as a temporary advantage for Ukrainian forces and emphasized Russia’s stance on a long-term settlement in talks with US NSA Waltz. He reiterated Russia’s need for a resolution that considers its interests, urged the US to acknowledge its demands, warned against superficial peace measures, and stated that Ukraine’s NATO membership is not negotiable in crisis resolution discussions.

Russia's Foreign Minister declared any foreign military deployment or bases in Ukraine as unacceptable, warning that such actions would constitute direct involvement in the conflict and prompt a full response from Russia. Waiting on Putin.

The US Envoy Witkoff has arrived in Moscow for talks

Central bank news:

• ECBs Nagel said that US tariffs could push Germany into recession. PS the IFW Institute says overnight that Germany is expected to stagnate in 2025.
• ECB policymaker Olli Rehn emphasized the need for negotiated solutions regarding US tariffs, urging the US administration to avoid unnecessary and harmful trade measures.
• ECBs Kazaks said he could say everything is done on inflation.
• BOJ Governor Ueda stated that underlying inflation remains slightly below 2% but is expected to gradually accelerate as the economy recovers. He noted that Japan's monetary base and balance sheet are currently too large, prompting a slowdown in bond buying, though balance sheet reduction remains a longer-term process. Ueda also expects real wages and consumption to improve as import cost increases moderate and wage growth remains strong. PS Reuters poll shows 61 of 62 economists expect BOJ to keep its interest rate at 0.50% next week. 70% expect a hike of 25 basis points in Q3 with 70% of those pushed for a date expect the hike in July.

The Fed members are under a gag-order (blackout period) as they prepare for their interest rate decision next Wednesday.

US stocks are lower with the Nasdaq now down -120 points. The S&P is down -23 points.

US yields are mixed:

• 2 year -0.2 basis points
• 5-year +0.07 bps
• 10 year +1.4 bps