National CPI Lower Than Expected Across All Measures, US Tsys Cheaper Overnight

National CPI prints 2.7% y/y versus expectations of an unchanged 2.8%. Core and Core-Core printed 2.6% y/y and 2.9% y/y respectively versus estimates of 2.7% and 3.0% and priors of 2.8% and 3.2%. The data should support the market in the early rounds of trading.

• In post-Tokyo trade, JGB futures are weaker, closing -12 compared to settlement levels, after US tsys closed 3-7bps cheaper. US tsys remain under pressure as markets gradually price out dovish policy projections for the year.
• Initial jobless claims were steady at 212k last week, still suggesting no uplift in trend compared to other leading indicators of job layoffs.
• The headline index of the Philly Fed survey jumped to a two-year high of 15.5 in April, with strength in new orders and shipments. Prices paid rose to a four-month high of 23.0 from 3.7.
• US tsys reacted negatively to comments from NY Fed Williams on the potential for a data-driven rate hike in the future. Markets may have overreacted while Williams simply stated the Fed can take its time and let well-positioned monetary policy work and let the economy continue to rebalance.
• Fed Bostic stated he doesn’t think it will be appropriate to lower borrowing costs until toward the end of the year.
• Later today, Chicago Fed Goolsbee will participate in a moderated Q&A at a SABEW conference ahead of the Fed blackout late Friday.