investingLive Americas FX news wrap 12 May:Hot CPI reignites inflation fears

US stocks close mixed. Rotation out of high flyers, and into industrials UK Energy Min. Milband told cabinet ministers he is prepared to run for Labour leadership Crude oil is settling at $102.18 up $4.11 or 4.19% The federal budget surplus for April $215 billion which is less than the $220 billion est. Trump News: Does not need Xi's help on Iran Fed's Goolsbee:Inflation is going the wrong way, not just in oil and tariff related things The US treasury sold $42 billion of 10-year notes that at high yield of 4.468% Kevin Warsh is confirmed to be a Federal Governor of the Federal Reserve Board Momentum stocks hit hard as traders take profits Pres. Trump: Ships are coming to Texas and Louisianna to load up with oil Fed's Goolsbee: We have an inflation problem in this country US April CPY 3.8% y/y vs 3.7% expected ADP NER Pulse showed a gain of 33K in the current week. investingLive European FX news wrap: JPY whipsaws, risk mood on the defensive India's CPI rises to 3.48% in April, driven by accelerating food inflation The April CPI report came in hot and pushed inflation concerns back to the forefront during the North American session. Headline CPI rose +0.6% m/m as expected, while the annual rate held at +3.3% y/y. The bigger surprise came from core CPI, which increased +0.4% m/m versus +0.3% expected, lifting the yearly rate to +2.8% from +2.6% previously. The key concern for the Fed was the reacceleration in shelter and services inflation. Shelter prices rose +0.6% m/m, with both rents and owners’ equivalent rent up +0.5%. Services less energy services also increased +0.5% m/m, reinforcing worries that underlying inflation pressures remain sticky. Food prices strengthened as well, while energy continued to drive much of the headline increase. Gasoline rose +5.4% m/m and remains up +28.4% y/y. Although some categories softened — including new vehicles, medical care commodities, and hospital services — the broader report suggested inflation pressures are becoming more widespread again. The hotter data pushed Treasury yields sharply higher, with the 2-year yield nearing 4.0% and the 10-year moving back toward 4.46% as traders further scaled back expectations for Fed rate cuts. The 30 year yield moved back above the 5% level to 5.024%, up 3.7 basis points. The US Treasury auctioned $42B of 10 year notes with below average demand. US stocks closed mixed. The Dow rose 56.99 points or 0.11% to 49,765.97, while the S&P 500 fell -11.88 points or -0.16% to 7,400.97. The Nasdaq led declines, falling -185.92 points or -0.71% to 26,088.20 as higher yields weighed on technology shares and the high flyers over the last month. Crude oil remained elevated above $102, supported by geopolitical tensions and supply concerns, while the US dollar stayed generally firm following the stronger inflation report. Chicago Fed President Austan Goolsbee delivered a more cautious tone today. He commented that inflation is going the wrong way — and not just in the obvious places. While tariffs and oil prices were always going to push headline numbers higher, Goolsbee flagged something more concerning: services inflation is drifting upward. That's the sticky, hard-to-shift component of the inflation basket, and seeing it move in the wrong direction was, in his words, today's "unexpected disappointment." On the labour market, his assessment was blunt — stable, but not good. The jobs picture isn't deteriorating enough to justify cuts, but it's not strong enough to absorb persistent inflation comfortably either. That leaves the Fed in an uncomfortable holding pattern: not yet a full-blown balancing act between its dual mandates, but clearly moving in that direction. The significance of the shift Goolsbee has historically been one of the more dovish voices on the FOMC — notably on record in the past saying that CPI doesn't need to reach 2% before the Fed can begin cutting. The fact that even he is tempering his optimism and acknowledging inflation is heading the w