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What to Watch: Yields Softer Ahead Jan CPI

US TSYS

US rates firmer, Tsy futures inching back near early London session highs (30YY currently 3.7523% vs. 3.7444% low), yld curves mixed in lead-up to headline CPI inflation data for Jan at 0830ET:

    • CPI MoM (0.1% rev, 0.5%); YoY 6.5%, 6.2%)
    • CPI Ex Food and Energy MoM (0.4% rev, 0.4%); YoY (5.7%, 5.5%)
    • CPI Index NSA (296.787, 298.710)
    • CPI Core Index SA (301.46 rev, 301.618)
  • SA revisions plus (known) revisions to CPI weights might muddy initial market reaction, potentially increasing volatility whilst the report is assessed.
  • With some upward monthly drivers seen coming from typically volatile categories such as used cars and airfares, watch other components for a better clue of more sustained market reaction.
  • Scheduled Fed speakers will likely add rebuttal:
    • Richmond Fed Barkin, Bbg TV at 0930ET
    • Dallas Fed Logan moderated discussion, text, Q&A, 1100ET
    • Philly Fed Harker economic outlook, text, Q&A, live streamed, 1130ET
    • NY Fed Williams keynote speech NY Bankers Assn, text, Q&A, 1405ET

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