It was always going to be rather subjective. At the end of the day, it seems like the verdict was that the US retail sales last week isn’t enough to shift the Fed perception for a 100 bps rate hike next week.

Waller floated the narrative but all things considered, he seems to be on his own as even Bullard isn’t really buying into a 100 bps move. As such, the housing market data this week may not be too important but they are still well worth watching. We will be getting the NAHB housing market index today, housing starts tomorrow, and existing home sales on Wednesday.

In any case, the reaction in the market is rather straightforward. The Fed’s path towards tightening is well telegraphed and anticipated by now. Hence, a retreat in odds of a 100 bps rate move (Fed funds futures show that being ~28% only now) is seeing the dollar slip up as yields also come down.

The UMich survey is also one that everyone should be wary of as it points towards a significant fall in inflation expectations as well. That has been a noteworthy market development and it plays to lower bond yields on the balance of things.

With markets leaning more towards a 75 bps rate hike now, the dollar may find little reason to get too perky this week. But considering the relative fundamentals, it is hard to imagine major selling in the greenback either. We might get more of a choppy week ahead of the FOMC meeting next week.