Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. Today in video format! This is a recording of the live session recorded at 0655 ET on Wednesday, June 11, 2025.
State of Play
Stocks advanced a bit yesterday. There was no news on a trade deal between the US and China and no real market-moving news elsewhere either. As a result, The Contrarian took the day off. As we eye or board of indicators for signs of direction at 0655 ET, things are pretty quiet ahead of the CPI print at 0830, though perhaps on edge a bit in the bond market:
Bonds are selling off a bit. The 10-year yield is up 3 basis points to 4.50%;
Stock index futures are flat as a board, with no major US index moving more than 0.2% from the break-even point;
Commodities are mixed. The big move is in copper, which is lower, to the tune of 2%. But WTI crude oil is up 1.5% to trade around $66/barrel. Gold and silver are unchanged;’
Cryptos aren’t doing anything. Bitcoin is unchanged around $109,200.
Today’s Known Events
The Consumer Price Index, or CPI, is the main event of the day, out at 0830. The numbers anticipated by a survey of economists:
0.2% month-over-month headline CPI, the same as last month;
2.5% year-over-year headline CPI (2.3% last month);
0.3% MoM core CPI (0.2%);
2.9% YoY core CPI (2.8%).
So you can see that a slight uptick in inflation is anticipated, almost certainly due to tariffs.
There’s also a bond auction worth paying attention to, at 1300. Ten-year notes are on offer. The last one of these produced a yield of 4.34%.
The Bottom Line
The increased expectation for the CPI may give us a little breathing space. Not that this will change the inevitable highly dramatic headlines from mainstream media outlets, should the CPI number meet these expectations. Markets are wise to this however and should probably still rally if the CPI comes in exactly as anticipated.
Often this is exactly what happens. For all their (numerous) faults, economists are usually pretty good at gauging inflation figures on a monthly basis — unless there is an exogenous shock. We saw that during Covid and when Russia invaded Ukraine. So far with tariffs, economist estimates have been solid. But we’ve only had one month.
That’s another reason this CPI print today is a big deal. If it shows not just that inflation is rising more than anticipated, but that economist estimates are out of whack, it could spook markets. You’re going to want to pay attention to bond markets especially, but stocks will likely follow.
So to summarize today’s set-up:
CPI below forecasts ➡️ stock and bonds rally
CPI meets forecasts ➡️ stocks rally. Bonds maybe
CPI above forecasts ➡️ stocks and bonds sell off
Then we have the bond auction in the afternoon, which also has the potential to hurt risk appetite. But a lot of the fear there appear to has dissipated as bond auction in other developed markets (specifically Japan) have been fine.
Housekeeping
Obviously this is not investment advice (duh). Do your own research, make your own decisions.
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