BMO's Ian Lyngen and Aaron Kohli eyed the...>

US VIEW: BMO's Ian Lyngen and Aaron Kohli eyed the Fed's waning worry on

"low-flation" and said "to a large extent, similar worries in the Treasury

market have arguably abated as well. That isn't to say that two consensus

inflation prints and core at +1.8% YoY (highest since April) represent the

triumphant return of pricing pressures, but it certainly reduces jitters that

lowflation will be permanent."

- They add "we're only somewhat skeptical (an improvement for us) and will

highlight the heavy concentration on shelter. In fact, during the last eight

months the only time that core-CPI has met expectations was when OER (owners'

equivalent rent) spiked at +0.35% in August and +0.32% in October - the two

highest prints of the year. Last week's inflation data also had a truly one-off

spike in used auto prices of +0.75%, the highest since 2012 and a clear function

of Hurricane Harvey auto replacement demand."