Eurodollar market action
It's interesting to note the technical action in the Eurodollar futures market. If you don't know what Eurodollar futures are, I'll keep it simple: Eurodollars PRICES rise when expectations for the level of future short-term rates decline. In other words, if investors expect the Federal Reserve Board to cut short-term interest rates down the road, Eurodollar futures contracts will rise in value.
As you can see in this chart of the June 2007 ED contract, prices have been in an uptrend for several weeks. But they topped out in late August and have now broken below that uptrend line. In other words, traders are getting LESS sure that the Fed will be cutting rates anytime soon. This isn't a MAJOR move, but it's a definite change in the short-term trend and worth noting. The earlier rally off the "benign" CPI figures has petered out and now, Treasury futures are largely flat.