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10Y dollar inflation yellen

Yuuuge Inflation Print Sends Dollar, March Odds, Yields Soaring

Going into the week it was all about two things: Yellen on Capitol Hill and Wednesday’s CPI print.

Both had the potential to change the way the market views the reflation narrative and the stakes were raised after last week’s “phenomenal” tax plan promise put the Trump trade squarely back in play. Here were the expectations for this morning’s inflation data (via Bloomberg):

  • CPI 0.3% m/m; range 0.1% to 0.4% (85 estimates)
  • Core CPI 0.2% m/m; range 0.2% to 0.3% (83 estimates)
  • CPI 2.4% y/y; range 2.2% to 2.5% (46 estimates)
  • CORE CPI 2.1% y/y; range 2.1% to 2.3% (47 estimates)
  • CPI Index NSA 242.479; range 242.341 to 242.6 (14 estimates)
    • “The energy component of the CPI could have recorded another sizable increase in January, climbing by perhaps 2.8%. According to AAA, average prices at the pump jumped by 3.4% over the course of last month”: Michelle Girard and Kevin Cummins, economists at Natwest
    • CPI has been on the rise since August

We’ll get more Yellen later this morning, but in the meantime, the CPI numbers are out and… yuuuge…

  • CPI rose 0.6% vs est. 0.3%, according to the BLS.
  • Forecast range from up 0.1% to up 0.4% from 85 estimates
  • Ex. food, energy up 0.3% vs est. 0.2%
  • CPI y/y rose 2.5% vs est. 2.4%
  • CPI NSA index level at 242.839
  • CPI for energy rose 4% last month, according to the BLS.
    • CPI for energy commodities rose 7.6% m/m last month.
    • CPI for fuel oil and other fuels rose 3.1% m/m last month.
    • CPI for fuel oil rose 3.5% m/m last month.
    • CPI for propane, kerosene, and firewood rose 4% m/m last month.
    • CPI for motor fuel rose 7.9% m/m last month.
    • CPI for gasoline (all types) rose 7.8% m/m last month.
    • CPI for gasoline, unleaded regular, rose 8% m/m last month.
    • CPI for gasoline, unleaded midgrade, rose 6.7% m/m last month.
    • CPI for gasoline, unleaded premium, rose 5.6% m/m last month.
    • CPI for other motor fuels rose 10.7% m/m last month.
    • CPI for energy services rose 0.3% m/m last month.
    • CPI for electricity unchanged m/m last month.
    • CPI for utility (piped) gas service rose 1.5% m/m last month.
  • USD RISES TO FRESH HIGH AS CPI, RETAIL SALES EXCEED ESTIMATES
    U.S. JAN. CONSUMER PRICES RISE 0.6%; CORE RATE RISES 0.3%
    TREASURIES EXTEND DECLINES; 10Y YIELD TOUCHES 2.515%
    FED FUND FUTURES PRICE MORE THAN 40% CHANCE OF MARCH RATE HIKE
    USD/JPY FRESH HIGH ABOVE 114.80, EYES 55-DMA 115.03

The machines were ready:

cpi

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1 comment on “Yuuuge Inflation Print Sends Dollar, March Odds, Yields Soaring

  1. Retail sales up .4%, not adjusted for inflation. CPI up .6%. Mr. math gives me a negative number.

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