🏦UBS on U.S. March Inflation

* US March CPI came in at 0.6% month-on-month, and 2.6% ,on-year, higher than expectations for 0.5% month-on-month and 2.5% year-an-year, and after 0.4% month-on-month, and 1.7% year-on-year. On a core basis, it was 0.3% month-on-month and 1.6% year-on-year, also higher than expectations - for 0.2% month-on-month, and 1.5% year-an-year, and after 0.1% month-on-month and 1.3% year-on-year

* The US dollar reaction to the US March CPI data was much the same as that for the US 10Y yield - EURUSD slides down and quickly recovers (loses and then regains around 20 pips on the numbers). The US 10-year yield, meanwhile, spiked 1bp on the data, then quickly dropped back to where it was at 1.6780

* Svcs, Tobacco, Used Cars Pushed CPI higher. Apparel, alcohol and new cars pulled it back. As was the case with the Non Farm Payrolls release and the ISM, the US CPI was priced in. It has been so well discussed that the reaction of the market would have been to a soft inflation number rather than strength