Morning Juice – US Session Prep (13th January)

Sentiment
The yen weakened after reports that Prime Minister Takaichi is planning a snap election, prompting investors to hedge against the risk of a more expansionary fiscal stance. The US dollar traded in a narrow range against its Group of 10 peers, while Treasuries slipped as traders awaited the release of US CPI data later on Tuesday.

USD/JPY climbed as much as 0.5% to 158.97, the highest level since July 2024, after local media reported that Takaichi, who has sought to offset rising living costs with stimulus measures, may call a national vote.

The yen had briefly strengthened earlier in the session after Finance Minister Katayama said her US counterpart Bessent shared concerns about the currency’s one-way weakening. The comments fueled speculation that Japan could intervene in markets to curb further losses.

Separately, President Trump’s announcement of new tariffs on goods from countries trading with Iran risks undermining his one-year trade truce with China, the world’s largest buyer of Iranian oil.

Docket
8:30 ET
US CPI for December
US CPI YoY – Forecast 2.7%, Previous 2.7% Range 2.9% / 2.5%
US CPI MoM – Forecast 0.3%, Previous 0.2% Range 0.5% / 0.1%
US Core CPI YoY – Forecast 2.7%, Previous 2.6% Range 3.1% / 2.6%
US Core CPI MoM – Forecast 0.3%, Previous 0.2% Range 0.5% / 0.2%

12:00 ET
EIA STEO Report (Tentative)

13:00 ET
US 30-Year Bond Auction
Prior High Yield – 4.773%
Prior Bid-to-Cover – 2.36

Speakers
10:00 ET
Fed’s Musalem speaks on a MNI Webcast about economic policy and the outlook
No text, Q&A is expected with a moderator

12:30 ET
Trump participates in a site visit and plant tour

14:00 ET
Trump delivers remarks to the Detroit Economic Club

16:00 ET
Fed’s Barkin speaks in a moderated conversation at the CFO Society in Washington
No text, Q&A is expected with a moderator

Good Luck!