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     CHICAGO (MNI) - It's a relatively quiet start to the new week. Following
last week's latest Continuing Resolution (CR)/debt ceiling funding passage,
Monday's focus will be on the January Treasury budget balance (-$23.2B prior,
$53.5B est) at 1400ET.
Markets eager for Valentine's day Wednesday with the release of January CPI
(0.2% prior, 0.4% est; ex food and energy 0.2% est) January Retail sales (0.4%
prior, 0.2% est) at 0830ET followed by Business inventories (0.4% prior, 0.3%
est) at 1000ET.
Aside from weekly jobless claims (221k prior, 228k est) at 0830ET Thursday, the
next headline data release is the January Final Demand PPI (-0.1% prior, 0.3%
Treasury auctions are limited this week to $48B 3M Bill and $42B 6M Bill
auctions Monday at 1130ET, 4W Bill auction announcement Tuesday at 1100ET, and
Thursday's $7B 30Y TIPS auction at 1300ET.
Federal Reserve speaker engagements are rather limited at the moment, Cleveland
Fed President Loretta Mester speaking at the Dayton Area Chamber of Commerce
Government Affairs Breakfast Series, in Dayton, Ohio at 0800ET Tuesday, Q&A
Dealer opinions on upcoming data vary.
Deutsche Bank economists estimate Wednesday's CPI will rise +0.3% due to
increased gas prices (despite Friday's sell-off) with core CPI steady at 0.2%. 
"A 0.16% reading on core would drag the year-on-year growth rate down a tenth to
1.65%," DB added. "Given that December's year-on-year rate rounded up to 1.8%,
there is a risk that January's rate rounds down to 1.6%, a smaller change than
would appear."
PPI's release after CPI, does not alter DB's "CPI forecast and we expect similar
gains for both the headline (+0.3% vs. -0.1%) and core (+0.2% vs. +0.1%) PPI
DB will be listening to Cleveland Fed President Mester's speech early Tuesday
"to see if her hawkish leanings have wavered in light of the market volatility."
DB takes a measured policy view noting that "sharp tightening of financial
conditions due to the correction in equities will likely have little impact on
the FOMC's near-term outlook for rate hikes. Of course, protracted equity
weakness, persistently elevated implied volatility or a meaningful widening of
credit spreads could lead to greater caution."
TD Securities economists estimate CPI to come in at 0.2% while they are "looking
for a slightly weaker retail sales print due to weakness in autos. We are
on-consensus for the ex-auto print." 
TD expects CPI "will be much more of market mover given that it could have
implications for hikes. Typically, a strong CPI print would have meant a bear
flattener because it would imply a faster pace of hikes. However, after the bear
steepening reaction in rates following last week's strong wage print, we think
that rates can move higher in a bear steepening move."
JP Morgan economists estimate a 0.21% gain in core CPI. JP Morgan adds that due
to the annual revisions, the December 2017 core print was revised down from
0.28% to 0.24%. However, this gain is still the largest since January 2017 and
well above the previous 6-month average of 0.16%.
The Federal Reserve also continues to gradually reduce its $4.5 trillion balance
sheet ($4.2 trillion in U.S. Treasuries and Agency MBS.) Monthly Fed
reinvestment caps consistent with the FOMC Sept. 20 decision and June 2017
- Oct-Dec 2017.. $6 billion./$4 billion 
- Jan-Mar 2018.. $12 billion/$8 billion 
- Apr-Jun 2018 $18 billion../$12 billion 
- Jul-Sep 2018 $24 billion../$16 billion 
- From Oct 2018** $30 billion $20 billion
Calendar of next week's market events (data, Fed speakers): 
- Feb 12 Feb NY Fed expectations survey 1100ET
- Feb 12 US Tsy $48B 3M Bill auction 1130ET
- Feb 12 US Tsy $42B 6M Bill auction 1130ET
- Feb 12 Jan Treasury budget balance (-$23.2B, $53.5B) 1400ET
- Feb 13 Jan NFIB Small Business Index (104.9, --) 0600ET
- Feb 13 Clev Fed Pres Mester, Dayton Area Chamber of Commerce Government
Affairs Breakfast Series, Dayton, Ohio, Q&A 0800ET
- Feb 13 10-Feb Redbook retail sales m/m (0.0%, --) 0855ET
- Feb 13 US Tsy 4W Bill auction 1100ET
- Feb 14 09-Feb MBA Mortgage Applications (0.7%, --) 0700ET
- Feb 14 Jan CPI (0.2%, 0.4%) 0830ET
- Feb 14 Jan CPI Ex Food and Energy (0.2%, 0.2%) 0830ET
- Feb 14 Jan retail sales (0.4%, 0.2%) 0830ET
- Feb 14 Jan retail sales ex. motor vehicle (0.4%, 0.5%) 0830ET
- Feb 14 Jan retail sales ex. mtr veh, gas (0.4%, --) 0830ET
- Feb 14 Dec business inventories (0.4%, 0.3%) 1000ET
- Feb 14 Feb Atlanta Fed inflation (2.0%, --) 1000ET
- Feb 14 09-Feb crude oil stocks ex. SPR w/w (1.9m bbl, --) 1030ET
- Feb 15 10-Feb jobless claims (221k, 228k) 0830ET 
- Feb 15 Jan Final Demand PPI (-0.1%, 0.3%) 0830ET
- Feb 15 Jan PPI ex. food and energy (-0.1%, 0.2%) 0830ET
- Feb 15 Jan PPI ex. food, energy, trade (0.1%, --) 0830ET
- Feb 15 Feb Empire Manufacturing Index (17.7, 17.7) 0830ET
- Feb 15 Feb Philadelphia Fed Mfg Index (22.2, 21.1) 0830ET
- Feb 15 Jan industrial production (0.9%, 0.2%) 0915ET
- Feb 15 Jan capacity utilization (77.9%, 78.0%) 0915ET
- Feb 15 11-Feb Bloomberg comfort index 0945ET
- Feb 15 Feb NAHB home builder index (72, --) 1000ET
- Feb 15 09-Feb natural gas stocks w/w (-119Bcf, --) 1030ET
- Feb 15 US Tsy $7B 30Y TIPS auction 1300ET
- Feb 15 Dec net TICS flows 1600ET
- Feb 15 Dec long term TICS 1600ET
- Feb 15 14-Feb Fed weekly securities holdings 1630ET
- Feb 16 Jan imports price index (0.1%, 0.6%) 0830ET
- Feb 16 Jan exports price index (-0.1%, --) 0830ET
- Feb 16 Jan housing starts (1.192m, 1.227m) 0830ET
- Feb 16 Jan building permits (1.300m, 1.293m) 0830ET  
- Feb 16 Feb NY Fed Business Leaders Index (18.1, --) 0830ET
- Feb 16 Feb Michigan sentiment index (p) (95.7, 95.5) 1000ET
- Feb 16 Q4 e-commerce retail sales (3.6%, --) 1000ET
- Feb 16 Q4 Advance NSA Service Revenue (+1.2%, --) 1000ET
- Feb 16 Q1 St. Louis Fed Real GDP Nowcast 1100ET
- Feb 16 Q1 NY Fed GDP Nowcast (3.3%, --) 1115ET
--MNI Chicago Bureau; tel: +1 312-431-0089; email:
--MNI Washington Bureau; tel: +1 202-371-2121; email:

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