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

Date Event Surv(M) Actual Prior Revised
02/12 Monthly Budget Statement $51.0b $49.2b $51.3b
02/13 NFIB Small Business Optimism 105.3 106.9 104.9
02/13 Revisions: Producer Price Index
02/14 MBA Mortgage Applications -4.10% 0.70%
02/14 CPI MoM 0.30% 0.50% 0.10% 0.20%
02/14 CPI Ex Food and Energy MoM 0.20% 0.30% 0.30% 0.20%
02/14 CPI YoY 1.90% 2.10% 2.10%
02/14 CPI Ex Food and Energy YoY 1.70% 1.80% 1.80%
02/14 CPI Index NSA 247.604 247.867 246.524
02/14 CPI Core Index SA 255.287 254.426 254.398
02/14 Retail Sales Advance MoM 0.20% -0.30% 0.40% 0.00%
02/14 Retail Sales Ex Auto MoM 0.50% 0.00% 0.40% 0.10%
02/14 Retail Sales Ex Auto and Gas 0.30% -0.20% 0.40% 0.00%
02/14 Retail Sales Control Group 0.40% 0.00% 0.30% -0.20%
02/14 Real Avg Weekly Earnings YoY 0.40% 0.70% 0.90%
02/14 Real Avg Hourly Earning YoY 0.80% 0.40% 0.60%
02/14 Business Inventories 0.30% 0.40% 0.40%
02/14 Bloomberg Consumer Comfort 57 54.4
02/15 Empire Manufacturing 18 13.1 17.7
02/15 Initial Jobless Claims 228k 230k 221k 223k
02/15 Continuing Claims 1925k 1942k 1923k 1927k
02/15 PPI Final Demand MoM 0.40% 0.40% -0.10% 0.00%
02/15 PPI Ex Food and Energy MoM 0.20% 0.40% -0.10%
02/15 PPI Ex Food, Energy, Trade MoM 0.20% 0.40% 0.10%
02/15 PPI Final Demand YoY 2.40% 2.70% 2.60%
02/15 PPI Ex Food and Energy YoY 2.00% 2.20% 2.30%
02/15 PPI Ex Food, Energy, Trade YoY 2.50% 2.30%
02/15 Philadelphia Fed Business Outlook 21.8 25.8 22.2
02/15 Industrial Production MoM 0.20% -0.10% 0.90% 0.40%
02/15 Manufacturing (SIC) Production 0.30% 0.00% 0.10% 0.00%
02/15 Capacity Utilization 78.00% 77.50% 77.90% 77.70%
02/15 NAHB Housing Market Index 72 72 72
02/15 Total Net TIC Flows -$119.3b $33.8b $33.5b
02/15 Net Long-term TIC Flows $27.3b $57.5b
02/16 Import Price Index MoM 0.60% 1.00% 0.10% 0.20%
02/16 Import Price Index ex Petroleum MoM 0.10% 0.50% -0.20% 0.00%
02/16 Import Price Index YoY 3.00% 3.60% 3.00% 3.20%
02/16 Export Price Index MoM 0.30% 0.80% -0.10% 0.10%
02/16 Export Price Index YoY 3.40% 2.60% 2.80%
02/16 Housing Starts 1234k 1326k 1192k 1209k
02/16 Housing Starts MoM 3.50% 9.70% -8.20% -6.90%
02/16 Building Permits 1300k 1396k 1302k 1300k
02/16 Building Permits MoM 0.00% 7.40% -0.10% -0.20%
02/16 U. of Mich. Sentiment 95.5 95.7
02/16 U. of Mich. Current Conditions 111.1 110.5
02/16 U. of Mich. Expectations 87.2 86.3
02/16 U. of Mich. 1 Yr Inflation 2.70%
02/16 U. of Mich. 5-10 Yr Inflation 2.50%