Treasury yields are mixed this morning as markets react to U.S. military actions in Yemen and a softer than expected wholesale inflation report for December.
A U.S.-led military coalition launched strikes against Houthi rebel targets in Yemen responsible for attacks against private shipping targets in the Red Sea in recent weeks. Oil prices initially rallied more than 4% on the news and are currently up 3% on the day. On the data front, core PPI was unchanged in December versus expectations of a 0.2% increase. On a year-over-year basis, the core rate dropped to 1.8% from 2% the prior month.
There have been multiple news reports in recent days highlighting the increased utilization of the Fed’s Bank Term Funding Program (BTFP) as financial institutions take advantage of the increased arbitrage opportunity of the lower borrowing rate relative to overnight cash and repo yields. Multiple Fed leaders have now suggested the facility will not be extended from its current expiration date on March 11. The current rate for the BTFP is 4.81% versus a 5.40% interest rate on reserve balances (IORB) at the Fed.
Jason Haley
Chief Investment Officer
| Date | Event | Survey | Actual | Prior | Revised |
| 1/12/2024 | PPI Final Demand MoM | 0.10% | -0.10% | 0.00% | -0.10% |
| 1/12/2024 | PPI Ex Food and Energy MoM | 0.20% | 0.00% | 0.00% | — |
| 1/12/2024 | PPI Ex Food, Energy, Trade MoM | 0.20% | 0.20% | 0.10% | — |
| 1/12/2024 | PPI Final Demand YoY | 1.30% | 1.00% | 0.90% | 0.80% |
| 1/12/2024 | PPI Ex Food and Energy YoY | 2.00% | 1.80% | 2.00% | — |
| 1/12/2024 | PPI Ex Food, Energy, Trade YoY | 2.50% | 2.50% | 2.50% | 2.40% |
| 1/16/2024 | Empire Manufacturing | -2.9 | — | -14.5 | — |
| 1/17/2024 | MBA Mortgage Applications | — | — | 9.90% | — |
| 1/17/2024 | New York Fed Services Business Activity | — | — | -14.6 | — |
| 1/17/2024 | Retail Sales Advance MoM | 0.40% | — | 0.30% | — |
| 1/17/2024 | Retail Sales Ex Auto MoM | 0.20% | — | 0.20% | — |
| 1/17/2024 | Retail Sales Ex Auto and Gas | 0.30% | — | 0.60% | — |
| 1/17/2024 | Retail Sales Control Group | 0.20% | — | 0.40% | — |
| 1/17/2024 | Import Price Index MoM | -0.70% | — | -0.40% | — |
| 1/17/2024 | Import Price Index ex Petroleum MoM | — | — | 0.20% | — |
| 1/17/2024 | Import Price Index YoY | — | — | -1.40% | — |
| 1/17/2024 | Export Price Index MoM | -0.70% | — | -0.90% | — |
| 1/17/2024 | Export Price Index YoY | — | — | -5.20% | — |
| 1/17/2024 | Industrial Production MoM | -0.10% | — | 0.20% | — |
| 1/17/2024 | Capacity Utilization | 78.70% | — | 78.80% | — |
| 1/17/2024 | Manufacturing (SIC) Production | -0.10% | — | 0.30% | — |
| 1/17/2024 | Business Inventories | -0.10% | — | -0.10% | — |
| 1/17/2024 | NAHB Housing Market Index | 39 | — | 37 | — |
| 1/17/2024 | Federal Reserve Releases Beige Book | ||||
| 1/18/2024 | Building Permits MoM | 0.90% | — | -2.50% | -2.10% |
| 1/18/2024 | Building Permits | 1480k | — | 1460k | 1467k |
| 1/18/2024 | Philadelphia Fed Business Outlook | -6.5 | — | -10.5 | -12.8 |
| 1/18/2024 | Housing Starts | 1418k | — | 1560k | — |
| 1/18/2024 | Housing Starts MoM | -9.10% | — | 14.80% | — |
| 1/18/2024 | Initial Jobless Claims | 207k | — | 202k | — |
| 1/18/2024 | Continuing Claims | — | — | 1834k | — |
| 1/19/2024 | U. of Mich. Sentiment | 69 | — | 69.7 | — |
| 1/19/2024 | U. of Mich. Expectations | 66.1 | — | 67.4 | — |
| 1/19/2024 | U. of Mich. Current Conditions | 73 | — | 73.3 | — |
| 1/19/2024 | U. of Mich. 1 Yr Inflation | — | — | 3.10% | — |
| 1/19/2024 | U. of Mich. 5-10 Yr Inflation | — | — | 2.90% | — |
| 1/19/2024 | Existing Home Sales | 3.83m | — | 3.82m | — |
| 1/19/2024 | Existing Home Sales MoM | 0.30% | — | 0.80% | — |
| 1/19/2024 | Total Net TIC Flows | — | — | -$83.8b | — |
| 1/19/2024 | Net Long-term TIC Flows | — | — | $3.3b | — |
