Treasury prices were lower overnight amid a better tone in risk markets (10yr yield as high as 2.89%), but the price action has largely reversed following the New York open. S&P 500 futures were up more than 30 points after European markets open, but it’s another choppy session (futures currently +15 points). The White House is expected to release its budget plan today, including a blueprint for more than $1 trillion of infrastructure spending, and many interest rate strategists are revising their forecasts higher given the budget’s negative impact on the federal deficit (i.e., more Treasury supply driving yields higher). As noted in Friday’s commentary, many are also pointing out the uniqueness of such deficit spending prior to a recession (and not during). This week’s economic calendar is headlined by the January CPI and retail sales reports on Wednesday.

Jason Haley
Managing Director, Investment Management Group

02/12Monthly Budget Statement$51.0b$51.3b
02/13NFIB Small Business Optimism105.3104.9
02/13Revisions: Producer Price Index
02/14MBA Mortgage Applications0.70%
02/14CPI MoM0.30%0.10%0.20%
02/14CPI Ex Food and Energy MoM0.20%0.30%0.20%
02/14CPI YoY1.90%2.10%
02/14CPI Ex Food and Energy YoY1.70%1.80%
02/14CPI Index NSA247.575246.524
02/14CPI Core Index SA254.426254.398
02/14Retail Sales Advance MoM0.20%0.40%
02/14Retail Sales Ex Auto MoM0.50%0.40%
02/14Retail Sales Ex Auto and Gas0.30%0.40%
02/14Retail Sales Control Group0.40%0.30%
02/14Real Avg Weekly Earnings YoY0.70%0.90%
02/14Real Avg Hourly Earning YoY0.40%0.60%
02/14Business Inventories0.30%0.40%
02/15Empire Manufacturing17.917.7
02/15Initial Jobless Claims228k221k
02/15Continuing Claims1927k1923k
02/15PPI Final Demand MoM0.40%-0.10%
02/15PPI Ex Food and Energy MoM0.20%-0.10%
02/15PPI Ex Food, Energy, Trade MoM0.20%0.10%
02/15PPI Final Demand YoY2.50%2.60%
02/15PPI Ex Food and Energy YoY2.00%2.30%
02/15PPI Ex Food, Energy, Trade YoY2.30%
02/15Philadelphia Fed Business Outlook21.522.2
02/15Industrial Production MoM0.20%0.90%
02/15Manufacturing (SIC) Production0.30%0.10%
02/15Capacity Utilization78.00%77.90%
02/15Bloomberg Consumer Comfort54.4
02/15NAHB Housing Market Index7272
02/15Total Net TIC Flows$33.8b
02/15Net Long-term TIC Flows$57.5b
02/16Import Price Index MoM0.60%0.10%
02/16Import Price Index ex Petroleum MoM0.10%-0.20%
02/16Import Price Index YoY2.90%3.00%
02/16Export Price Index MoM0.30%-0.10%
02/16Export Price Index YoY2.60%
02/16Housing Starts1235k1192k
02/16Housing Starts MoM3.60%-8.20%
02/16Building Permits1300k1302k1300k
02/16Building Permits MoM0.00%-0.10%-0.20%
02/16U. of Mich. Sentiment95.495.7
02/16U. of Mich. Current Conditions111.1110.5
02/16U. of Mich. Expectations87.286.3
02/16U. of Mich. 1 Yr Inflation2.70%
02/16U. of Mich. 5-10 Yr Inflation2.50%