The Treasury curve is slightly higher this morning while the shape remains essentially unchanged. The modest selloff in Treasuries was sparked by news that German Chancellor Merkel had made good progress in establishing a new governing coalition. The news pushed the euro to a 37-month high against the dollar.

The month over month change in US headline CPI came in line with expectations at 0.1%, while the core measure (excludes food and energy prices) came in 0.1% higher at 1.8%. A rise in housing costs solidified US inflation data, which should give the Fed more confidence to raise rates in 2018, with the market currently pricing in an 88% chance of a hike at the March meeting.

Hafizan Hamzah
Director, Investment Management Group

01/08Consumer Credit$18.000b$27.951b$20.519b$20.532b
01/09NFIB Small Business Optimism107.8104.9107.5
01/09JOLTS Job Openings6025587959965925
01/10MBA Mortgage Applications8.30%0.70%-1.60%
01/10Import Price Index MoM0.40%0.10%0.70%0.80%
01/10Import Price Index ex Petroleum MoM0.10%-0.20%0.10%0.20%
01/10Import Price Index YoY3.10%3.00%3.10%3.30%
01/10Export Price Index MoM0.30%-0.10%0.50%
01/10Export Price Index YoY2.60%3.10%
01/10Wholesale Inventories MoM0.70%0.80%0.70%
01/10Wholesale Trade Sales MoM0.60%1.50%0.70%0.80%
01/11Revisions: Philadelphia Fed Manufacturing Index
01/11PPI Final Demand MoM0.20%-0.10%0.40%
01/11PPI Ex Food and Energy MoM0.20%-0.10%0.30%
01/11PPI Ex Food, Energy, Trade MoM0.20%0.10%0.40%
01/11PPI Final Demand YoY3.00%2.60%3.10%
01/11PPI Ex Food and Energy YoY2.50%2.30%2.40%
01/11PPI Ex Food, Energy, Trade YoY2.30%2.40%
01/11Initial Jobless Claims245k261k250k
01/11Continuing Claims1920k1867k1914k1902k
01/11U.S. Economic Forecasts: Bloomberg Monthly Survey (Table)
01/11Bloomberg Consumer Comfort53.551.8
01/11Monthly Budget Statement-$26.0b-$23.2b-$27.3b
01/12CPI MoM0.10%0.10%0.40%
01/12CPI Ex Food and Energy MoM0.20%0.30%0.10%
01/12CPI YoY2.10%2.10%2.20%
01/12CPI Ex Food and Energy YoY1.70%1.80%1.70%
01/12CPI Index NSA246.372246.524246.669
01/12CPI Core Index SA254.333254.426253.724
01/12Retail Sales Advance MoM0.50%0.40%0.80%0.90%
01/12Retail Sales Ex Auto MoM0.30%0.40%1.00%1.30%
01/12Retail Sales Ex Auto and Gas0.40%0.40%0.80%1.20%
01/12Retail Sales Control Group0.40%0.30%0.80%1.40%
01/12Real Avg Weekly Earnings YoY0.70%0.80%
01/12Real Avg Hourly Earning YoY0.40%0.20%
01/12Business Inventories0.40%-0.10%