We highlighted yesterday the fall in volatility that had been seen over the past week, but also mentioned that month end brings with it risk of more erratic trading. Some of that was evident yesterday in the wake of the latest price data from the US, which showed headline inflation falling into negative territory. Still, the dollar managed a decent recovery, especially against sterling and the euro, largely on the firmer than expected increase in core prices. Sterling itself failed to push above the 1.55 level on a sustained basis, with the details of Q4 GDP data still showing a fairly unbalanced economy, supported by a net trade improvement which will could well struggle to be sustained as EURGBP moves ever lower. Yesterday’s move means that the dollar index (DXY) is now in positive territory for the month and could mean that we see the dollar gain for an eighth consecutive month on this measure. The data today is going to be secondary to month end flows, with just Q4 PCE data in the US, together with Pending Home Sales, Chicago PMIs and Michigan sentiment.