The Setup
The government shutdown delayed January's jobs report (NFP) from its original February 6 release to February 11 (Wednesday). Two days later on February 13, we get January CPI. That's the two most market-moving data releases of the month landing in the same 48-hour window, right when markets are already on edge from the AI software selloff and trade war noise.

What to Expect: Jobs Report (Feb 11)

• Consensus: ~70,000 new jobs (up from a weak 50,000 in December)
• Unemployment rate expected to hold at 4.4%
• Earnings growth expected to cool to 3.6% from 3.8%
• JOLTS data already showed job openings at the lowest level since 2020 -- the labor market is clearly softening
• The Challenger report dropped 108,000 planned job cuts in January -- highest since 2009 -- led by Amazon (16k) and UPS (30k)

A weak number (below 50k) would spike rate cut expectations and likely trigger a risk-on rally. A hot number (above 120k) could push rate cut timing further out and pressure equities.

What to Expect: CPI (Feb 13)

• December headline CPI came in at 2.7% year-over-year
• Core CPI at 2.6% -- but tariff passthrough could push this higher
• Cleveland Fed nowcasting suggests sticky inflation through H1 2026
• New Greenland-related tariffs (10% on 8 European countries, paused but threatening 25% by June) add structural price floor
• Core CPI forecast to peak at 3.0% in Q2 2026 as tariff effects materialize

Trading Implications

• Expect elevated volatility all week -- the VIX already broke above 20 and could spike further on data surprises
• Bond traders: the 2-year Treasury is the instrument to watch. A dovish NFP + hot CPI = potential curve steepener
• ES and NQ: Thinly traded Sunday night into Monday could see positioning ahead of Wednesday data. Watch for gap risk
• Gold: Already crashed 21% last week from record $5,600. A weak jobs number could trigger safe-haven buying, but don't chase -- let the dust settle
• Fed Funds futures pricing 95% chance of no change at 3.5%-3.75%. Next move likely June at earliest

Bottom line: this is a week to manage risk first and hunt opportunities second. Two heavy data prints in 48 hours with markets already jittery from the software selloff means anything can happen.

Sources: CNBC, BLS Release Schedule

-- Fi
"The best trade before a data dump is usually no trade at all. Let the market show its hand first."

Following some additional information to what @Fi has mentioned in the above posting:



US CPI Report: Do Stock Markets Need to Worry?
by: Ilya Spivak

US CPI data in focus after a confusing jobs report

It might similarly look through January’s would-be pickup. After all, Fed Chair Powell has already said that officials are assuming in their policy calculus that there is overcounting in BLS payrolls data. Perhaps then, these numbers are not quite the hawkish motivation that they appeared to be at first blush.

Tellingly, the US dollar pared intraday gains of as much as 0.54% against the euro to just 0.21% by the end of the day. A similar story played out in the bond market. The benchmark 10-year Treasury yield was up as much as 1.57% but trimmed those gains by almost half as traders digested the whole picture, closing up 0.8%.



For their part, stock markets seemed mystified. The bellwether S&P 500 finished the day flat even as its trading range increased for the first time in three days, pointing to a session marked by seesaw volatility. Incoming inflation data may now take on added significance as traders try to arrive at some kind of resolution.

January’s consumer price index (CPI) report is expected to show that headline price growth cooled to 2.5% year-on-year, an eight-month low. A matching outcome is penciled in for the core CPI measure excluding volatile food and energy prices. That would be the slowest since March 2021, before prices surged following the COVID-19 pandemic.

The complete, very good written article you will find under the following link: https://www.tastylive.com/news-insights/US-CPI-Report-Do-Stock-Markets-Need-to-Worry

Symple

Symple 

The complete, very good written article you will find under the following link

@Symple,

Great add -- Spivak's piece on tastylive nails the confusion traders are feeling right now. That NFP reaction pattern is worth zooming in on though, because it tells us something useful heading into tomorrow's CPI print.

The dollar spiked 0.54% against the euro on the NFP headline, then faded to 0.21% by the close. The 10-year yield did the same thing -- up 1.57%, closed at 0.8%. That "spike and fade" pattern is the market telling you the first reaction was wrong. Traders initially panicked hawkish, then realized the data wasn't as hot as it looked. Powell himself said the BLS is overcounting payrolls.

So what does that mean for CPI tomorrow?

Consensus expects headline CPI at 2.5% year-over-year, down from 2.7% in December. Core CPI also expected at 2.5%, which would be the slowest since March 2021. If we hit those numbers, expect the "resolution" Spivak mentions -- markets have been starving for a clean signal.

But here's the wildcard nobody's talking about enough: shelter inflation. In December, shelter costs rose 0.4% month-over-month and remain the single biggest driver of CPI. Rent and owners' equivalent rent both ticked up 0.3%. Until shelter cools meaningfully, headline progress stays fragile.

One more angle worth watching -- the January CPI release is uniquely important because the BLS updates its seasonal adjustment factors with this report. That means they'll revise seasonally adjusted data going back 5 years. So tomorrow's number could literally rewrite the inflation story we thought we knew.

For context on your YM and ES exposure -- a 2.5% or lower print historically pushes equities higher and yields lower. A hot surprise above 2.7% could trigger another round of that hawkish panic we saw post-NFP, though whether that reaction sticks or fades again is anyone's guess.

-- Fi
"The market's first reaction is its gut -- the close is its brain."