The Treasury curve is lower and flatter this morning pivoting around the 2-year part of the curve, with the spread between the 2-year and the 10-year now down to 67 bps from 72 bps as of yesterday’s close. This week was solid for inflation data, as CPI and PPI were both robust and today the Import Price index came in 0.4% higher than expected at 1% in January, with the big driver being higher oil prices. Rising import prices combined with higher consumer and producer prices contribute to a picture of rising inflation in the US.

Hafizan Hamzah
Director, Investment Management Group

02/12Monthly Budget Statement$51.0b$49.2b$51.3b
02/13NFIB Small Business Optimism105.3106.9104.9
02/13Revisions: Producer Price Index
02/14MBA Mortgage Applications-4.10%0.70%
02/14CPI MoM0.30%0.50%0.10%0.20%
02/14CPI Ex Food and Energy MoM0.20%0.30%0.30%0.20%
02/14CPI YoY1.90%2.10%2.10%
02/14CPI Ex Food and Energy YoY1.70%1.80%1.80%
02/14CPI Index NSA247.604247.867246.524
02/14CPI Core Index SA255.287254.426254.398
02/14Retail Sales Advance MoM0.20%-0.30%0.40%0.00%
02/14Retail Sales Ex Auto MoM0.50%0.00%0.40%0.10%
02/14Retail Sales Ex Auto and Gas0.30%-0.20%0.40%0.00%
02/14Retail Sales Control Group0.40%0.00%0.30%-0.20%
02/14Real Avg Weekly Earnings YoY0.40%0.70%0.90%
02/14Real Avg Hourly Earning YoY0.80%0.40%0.60%
02/14Business Inventories0.30%0.40%0.40%
02/14Bloomberg Consumer Comfort5754.4
02/15Empire Manufacturing1813.117.7
02/15Initial Jobless Claims228k230k221k223k
02/15Continuing Claims1925k1942k1923k1927k
02/15PPI Final Demand MoM0.40%0.40%-0.10%0.00%
02/15PPI Ex Food and Energy MoM0.20%0.40%-0.10%
02/15PPI Ex Food, Energy, Trade MoM0.20%0.40%0.10%
02/15PPI Final Demand YoY2.40%2.70%2.60%
02/15PPI Ex Food and Energy YoY2.00%2.20%2.30%
02/15PPI Ex Food, Energy, Trade YoY2.50%2.30%
02/15Philadelphia Fed Business Outlook21.825.822.2
02/15Industrial Production MoM0.20%-0.10%0.90%0.40%
02/15Manufacturing (SIC) Production0.30%0.00%0.10%0.00%
02/15Capacity Utilization78.00%77.50%77.90%77.70%
02/15NAHB Housing Market Index727272
02/15Total Net TIC Flows-$119.3b$33.8b$33.5b
02/15Net Long-term TIC Flows$27.3b$57.5b
02/16Import Price Index MoM0.60%1.00%0.10%0.20%
02/16Import Price Index ex Petroleum MoM0.10%0.50%-0.20%0.00%
02/16Import Price Index YoY3.00%3.60%3.00%3.20%
02/16Export Price Index MoM0.30%0.80%-0.10%0.10%
02/16Export Price Index YoY3.40%2.60%2.80%
02/16Housing Starts1234k1326k1192k1209k
02/16Housing Starts MoM3.50%9.70%-8.20%-6.90%
02/16Building Permits1300k1396k1302k1300k
02/16Building Permits MoM0.00%7.40%-0.10%-0.20%
02/16U. of Mich. Sentiment95.595.7
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%