Rates rallied overnight as continued uncertainty around the US Senate tax reform bill has sparked a risk-off trade, as equities and commodities continue their slide. Oil fell on unexpectedly high inventories as well as news that Russia is expressing trepidation regarding continuing the current OPEC supply cuts. October CPI came in as expected, increasing 0.1%; while core CPI moved up by 0.2%. The year-over-year pace for headline CPI decreased to 2.0% from 2.2%, and core CPI moved up to 1.8% from 1.7%. The Fed should have the confidence to keep the pace of their policy tightening as core consumer inflation appears to be well contained.

Hafizan Hamzah
Director, Investment Management Group

11/13Monthly Budget Statement-$59.0b-$63.2b-$45.8b
11/14NFIB Small Business Optimism104103.8103
11/14PPI Final Demand MoM0.10%0.40%0.40%
11/14PPI Ex Food and Energy MoM0.20%0.40%0.40%
11/14PPI Ex Food, Energy, Trade MoM0.20%0.20%0.20%
11/14PPI Final Demand YoY2.40%2.80%2.60%
11/14PPI Ex Food and Energy YoY2.20%2.40%2.20%
11/14PPI Ex Food, Energy, Trade YoY2.30%2.10%
11/15MBA Mortgage Applications3.10%0.00%
11/15CPI MoM0.10%0.10%0.50%
11/15CPI Ex Food and Energy MoM0.20%0.20%0.10%
11/15CPI YoY2.00%2.00%2.20%
11/15CPI Ex Food and Energy YoY1.70%1.80%1.70%
11/15CPI Core Index SA253.252253.428252.86
11/15CPI Index NSA246.646246.663246.819
11/15Real Avg Weekly Earnings YoY0.40%0.60%
11/15Real Avg Hourly Earning YoY0.40%0.70%0.60%
11/15Empire Manufacturing25.119.430.2
11/15Retail Sales Advance MoM0.00%0.20%1.60%1.90%
11/15Retail Sales Ex Auto MoM0.20%0.10%1.00%1.20%
11/15Retail Sales Ex Auto and Gas0.30%0.30%0.50%0.60%
11/15Retail Sales Control Group0.30%0.30%0.40%0.50%
11/15Business Inventories0.00%0.70%
11/15Total Net TIC Flows$125.0b
11/15Net Long-term TIC Flows$67.2b
11/16Initial Jobless Claims235k239k
11/16Continuing Claims1900k1901k
11/16Philadelphia Fed Business Outlook24.627.9
11/16Import Price Index MoM0.30%0.70%
11/16Import Price Index ex Petroleum MoM0.20%0.30%
11/16Import Price Index YoY2.50%2.70%
11/16Export Price Index MoM0.40%0.80%
11/16Export Price Index YoY2.90%
11/16Industrial Production MoM0.50%0.30%
11/16Capacity Utilization76.30%76.00%
11/16Manufacturing (SIC) Production0.50%0.10%
11/16Bloomberg Consumer Comfort51.5
11/16Bloomberg Economic Expectations47.5
11/16NAHB Housing Market Index6768
11/16-11/17MBA Mortgage Foreclosures1.29%
11/16-11/17Mortgage Delinquencies4.24%
11/17Housing Starts1190k1127k
11/17Housing Starts MoM5.60%-4.70%
11/17Building Permits1250k1215k1225k
11/17Building Permits MoM2.00%-4.50%-3.70%
11/17Kansas City Fed Manf. Activity2123