There's not much in it so far in European morning trade as market players are all waiting on the US CPI data later today before firming up any convictions. Major currencies were more pensive earlier and little changed but we are seeing some light moves now with the dollar slightly softer. That said, it isn't anything material as the ranges are still relatively contained for the most part.

EUR/USD is up a little to 1.0230 but even then, the range today is not even 30 pips so that kind of exemplifies the lack of meaningful price action for the time being. In the bigger picture, the pair is still caught between 1.0100 and the 50.0 Fib retracement level at 1.0283 and we'll have to see if the US CPI data later can be a catalyst for any technical pushes this week:

Well, they definitely are - at least from what can be observed in the region. The situation on the ground hasn't changed all too much since last week. China were supposed to conduct military drills around Taiwan for four days (4 to 7 August) but they have continued operations until today. It was reported earlier that Chinese navy ships remained active off both Taiwan's east and west coasts on Wednesday morning.

As mentioned yesterday, don't expect China to relent on the pressure and they are likely to keep up military presence surrounding the Taiwan island for the foreseeable future.

There isn't much else that needs to be said as markets are looking rather pensive awaiting the US CPI data later today.

While risk trades and the dollar are key focus areas surely to be impacted by the release, it is best to be wary that the bond market remains a key spot to watch in trading this week as well.

The narrow ranges are continuing to play out for the most part, with there being a lack of interest and firm convictions among traders so far today. All eyes are on the US CPI data and you can understand why we are seeing a slow start to proceedings.

It is reflective of some anxiety and uneasiness ahead of the key risk event later but the recent headlines from Europe have been less than ideal in any case. The gas crisis is still looming large and the UK also announced planned blackouts and gas cuts for January yesterday. The mood in US futures is also not helping too much with S&P 500 futures seen down 0.2% currently.

The market mood is more pensive after stocks declined yesterday, pulling back the gains from Monday. There is a sense of apprehension ahead of the US CPI data today but what comes next will depend on what the figures will offer later in the day. Elsewhere, S&P 500 futures are down 7 points, or 0.2%, currently.

It has been a bit of a slow week with it being the summer and when you throw in the anticipation to the US CPI data later today, it doesn't help with how things have been so far this week. On top of that, there is a lack of meaningful economic releases and today is another one of those days in Europe as well.

Markets are lacking any real appetite as all eyes are fixated on the US consumer inflation report, so don't expect much in terms of meaningful action in the session ahead. At most, we will see some positioning flows but any real convictions will only be settled once we get to the key release.

Besides some potential positioning plays ahead of the key risk event, there won't be much else to scrutinise in markets in the session ahead. So far, there is a lack of interest and appetite with major currencies being little changed for the most part.

It's Wednesday already and we're finally getting there. Markets have been fixated on the US CPI data release that will come later today, with the past two days featuring a bit more of a snoozefest and lack of trading direction.

After the hot US jobs report at the end of last week, we're going to run it all back again today in another round of "who knows best" when it comes to deciphering the Fed pivot. After a 9.1% annual inflation print in June, we are expected to see the reading slip back to 8.7% in July. However, the core reading is estimated to have increased from 5.9% in June to 6.1% in July. That won't be of much comfort, so it will depend on how the market reads into the numbers.

The top representative of China's Communist Party in Australia, ambassador Xiao Qian was asked about trade issues (China has levied punitive sanction on Australian goods) along with the political imprisonment of an Australian in China:

This is from Blackrock (BlackRock is the world's largest asset manager, with circa US$9.5 trillion in assets under management) on the Federal Reserve, BoE and ECB:

We are in a new world shaped by supply. Major spending shifts and production constraints are driving inflation. Constraints are rooted in the pandemic and have been exacerbated by the war in Ukraine and China's lockdowns.