CitiEuropean OpenThe US CPI ahead seems to be reducing risk appetite in a dull session, with DXY flat and treasuries firmer in a tight range. Chinese CPI and PPI missed in today’s print, while USDCNH dipped on the announcement, on the back of a return in spot selling interest. Comments from BoJ’s Kuroda did not surprise markets, with JPY holding steady. NOK gained 0.36% as it continued to grind higher.Looking forward, the US CPI at 13:30 GMT is the main print markets are looking forward to. However, we also note that the US Federal Reserve Beige Book will be out at 19:00 GMT. Focus will also be directed to any headlines from the NATO-Russia talks today, with a presser expected around 12:30 GMT according to the official schedule. EUR will look forward to Eurozone IP at 10:00 GMT, while CZK will see CPI at 08:00 GMT. India will see IP and CPI at 12:00 GMT and RUB will sight a WoW CPI at 16:00 GMT, although there may be some noise due to the recent holidays.USD highlightsUSD was flat across the session, as we saw some 2y UST yields were up by 1 bp, while 5y and 10y yields were down 1bp, as we look forward to the US CPI. Our trader Hideyuki Liu notes the following below:–Treasuries have traded firmer in a tight range today, with intermediates leading the outperformance. The market found relief in no new hawkish surprise from Powell’s testimony to the Senate. As such, all assets have found some relief at least for now. Desk flows have seen RM buying in intermediates, while hedge-related selling was seen in long-end.Key Takeaways from Powell–Labor markets: Powell highlighted the importance of managing risks to the labor market that have been particularly derived from inflation.–Balance sheet: Powell did not detail the timing of balance sheet run off but suggested it will happen probably later this year. Powell said, “Sooner and faster that much is clear” and that the balance sheet is “far above where it needs to be.”–Lift-off: There was no explicit pushback against market expectations of a March hike.NY session price action saw DXY down however, despite Powell’s comments. US Treasury yields were relatively unchanged as well. Meanwhile, equities rebounded to end the NY session positive. We saw a 1.4% rally in the tech-heavy Nasdaq index (15153 at NY close), while S&P 500 rallied as much as 1% from the lows of the day. S&P closed +0.9% at 4713.Looking forward, we will see two input for Fed watchers:–CPI YoY at 13:30 GMT for December. The market forecasts a print of 7.1% vs 6.8% prior. Citi Economics expects a strong 0.44%MoM reading, with more upside than downside risk. Outside of a potential bounce in airfares and further increases in used car prices, we are particularly interested in the extent to which price rises are becoming more dispersed across services categories as we noted the more broad based increase in wages costs across sectors in the December jobs report.–We will also look to the US Federal Reserve Beige Book at 19:00 GMT for additional insights on the economy, although we do not expect it to move markets.