S&P 500 and especially bonds closed on a cautious basis yesterday, clearly positioned for a hawkish surprise in the run up to the CPI release. While headline delivered solidly on disinflation expectations, core didn‘t do so really. The key move that‘s set to overpower the bears as a bare minimum for today, is the reversal in tightening odds, even if for Jun only. The jubilation is set to prevail today. Right or wrong, the Fed is being forced by markets to back off, and as a side effect that takes some heat off the continued deposits flight when T-Bill rates go down. The behavior of the short e…

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