February 7, 2022 Headlines

The Treasury market is calmer to start the week (for now) following Friday’s sharp sell-off that sent front-end yields 11 basis points higher. Two-year to five-year yields are essentially back to the range of pre-Covid levels (before the Fed cut rates), and as discussed in Friday morning’s commentary, a blowout jobs report was the culprit for the most recent round of fixed income weakness. Upon further inspection, seasonal adjustments and annual benchmark revisions were responsible for much of the upside surprise. To be clear, the labor market is very strong, but the January report came with a decent amount of statistical noise. Regardless, a bond market void of convicted buyers was walloped by speculators pricing for an even more aggressive Fed, including a 50 bps initial rate hike in March. Yes, the market feels a bit oversold on the front-end of the curve, but until we get more firm guidance from the Fed with regards to its intentions, it’s hard to argue that case. The headline event for this week’s calendar will be the January CPI report (Thursday), and geopolitical risks related to Russia and Ukraine remain at the forefront.

Jason Haley
Chief Investment Officer

Date	Event	Surv(M)	Actual	Prior	Revised
02/07/22	Consumer Credit	$25.000b	—	$39.991b	—
02/08/22	NFIB Small Business Optimism	97.5	—	98.9	—
02/08/22	Trade Balance	-$83.0b	—	-$80.2b	—
02/08/22	Revisions: CPI
02/09/22	MBA Mortgage Applications	—	—	12.00%	—
02/09/22	Wholesale Inventories MoM	2.10%	—	2.10%	—
02/09/22	Wholesale Trade Sales MoM	—	—	1.30%	—
02/10/22	Real Avg Hourly Earning YoY	—	—	-2.40%	-2.00%
02/10/22	Real Avg Weekly Earnings YoY	—	—	-2.30%	-2.00%
02/10/22	Revisions: PPI
02/10/22	CPI MoM	0.40%	—	0.50%	—
02/10/22	CPI Ex Food and Energy MoM	0.50%	—	0.60%	—
02/10/22	CPI YoY	7.20%	—	7.00%	—
02/10/22	Initial Jobless Claims	230k	—	238k	—
02/10/22	CPI Ex Food and Energy YoY	5.90%	—	5.50%	—
02/10/22	Continuing Claims	1609k	—	1628k	—
02/10/22	CPI Index NSA	280.428	—	278.802	—
02/10/22	CPI Core Index SA	285.976	—	284.759	—
02/10/22	Monthly Budget Statement	$25.0b	—	-$21.3b	—
02/11/22	Bloomberg Feb. United States Economic Survey
02/11/22	U. of Mich. Sentiment	67.5	—	67.2	—
02/11/22	U. of Mich. Current Conditions	—	—	72	—
02/11/22	U. of Mich. Expectations	—	—	64.1	—
02/11/22	U. of Mich. 1 Yr Inflation	—	—	4.90%	—
02/11/22	U. of Mich. 5-10 Yr Inflation	—	—	3.10%	—
02/11/22	Revisions: PPI

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