After the shock, no give-back. CPI Wednesday.

DXY 101.37 · EUR/USD 1.1383 · USD/JPY 161.74 · US10Y 4.37% · Brent $72.91 · XAU $4083

Monday open after the NFP shock. The clearest data point of the session is what did not happen. DXY did not give back Friday's move; the Asia open held 99.9 and the European session is consolidating there. USD/JPY did not back off; the pair is trading 161.74, above Friday's close, and MoF stayed silent through the weekend. The OIS curve did not retrace; year-end December hike odds drifted further to roughly 70 percent from Friday's 60. Brent at $72.91 did break lower, and gold gave back another $70, both consistent with the geopolitical premium continuing to bleed out. The pattern is the textbook signature of a regime change that has cleared the weekend test: positions did not rotate, the levels held, the volatility is in. The next observation is CPI on Wednesday.

Why no give-back matters

Three reasons Monday matters more than a typical Monday.

1. Position rotation usually shows up on the weekend. Crowded long-EUR books had two clean opportunities to unwind during the weekend, and the Monday open did not deliver the corresponding flow. EUR/USD held the 1.155 zone and did not bounce on short covering, which says the position is now either at neutral or short. That is consistent with the Friday CFTC reading we have flagged across the chain.
2. MoF silence is informative. The graduated verbal-intervention script had Japan at step three going into the weekend. Step four would have arrived by Sunday Asia open if MoF were planning to act before CPI. There was no escalation. The probability of an MoF operation ahead of Warsh's first FOMC is now substantially lower than it looked Friday. The yen carry trade is open.
3. Bond market did not retrace. The 10-year yield at 4.37 percent sits within two basis points of Friday's close. The OIS curve repricing we covered Friday did not get faded over the weekend. Treasury auctions this week and the CPI Wednesday print are the next testers.

What CPI Wednesday actually does

Three things move on a CPI surprise, and only one of them is DXY. We cover breakevens in today's reference piece, because the cleanest read of a CPI surprise is in the inflation-expectations decomposition.

• The 5-year breakeven. A hot CPI pushes the near-term breakeven higher by 3 to 6 basis points per 0.1 percentage-point upside surprise on core. A soft print compresses it by similar magnitude. The 5y5y forward moves less; it sits at the cleaner long-run anchor.
• The OIS path. Through the OIS lens, a 0.1-point upside core CPI surprise typically pushes the implied year-end FF rate up by roughly 6 to 8 basis points. That moves DXY by 0.2 to 0.4 percent through the rate-differential channel.
• The Warsh SEP framing risk. A hot core CPI on top of the NFP makes the dovish path at Warsh's first SEP very difficult to defend. A soft core CPI re-opens the trimmed-mean framing we covered, which Warsh has previously favoured.

Asymmetries through the week

The market is now priced for the data to continue running hot. That means the asymmetry has flipped versus where it sat two weeks ago:

• A hot CPI is mostly in the price. Headline CPI consensus is roughly 3.6 percent year-on-year, with core at 3.5 percent. A clean upside surprise of 0.2 percentage points on core would push DXY through 100 and USD/JPY toward 161. Beyond that, the move is in.
• A soft CPI is the unpriced scenario. A 0.2-point downside surprise on core would unwind the OIS hike pricing roughly halfway, drop DXY back through 99, and give EUR/USD a bounce back toward 1.165. That is the asymmetric trade.
• The smile right-edge needs an extension catalyst. The dollar is on the right edge of the smile now, supported by growth-differential. Holding the right edge requires the data continuing to confirm. A miss on CPI is the cleanest single observation that pulls the dollar back toward the trough.

What to watch this week

• 3-year and 10-year Treasury auctions (Tuesday). Tails matter. A weak 10-year auction is a term-premium tell that the supply-and-demand picture is breaking against the long end.
• CPI (Wednesday). The print and the composition. Read services ex-housing, which is the cleanest demand read.
• PPI (Thursday). Feeds into the PCE forecast for the end of the month and into the SEP projections.
• Michigan preliminary (Friday). The inflation-expectations sub-index matters more than the headline. A move higher there reinforces the post-NFP regime.
• Warsh's first scheduled remarks. Could land at any point this week. If they do, they are the most-watched single comment of the month.