|10-Year: +12/32....%.... GNMAs: .... USD/JPY: 108.22.... EUR/USD: 1.1524|
-- Treasuries look to carve out short-term bottom after four days of sideways action
-- 8:30 ET: December CPI (actual -0.1%; Briefing.com consensus -0.1%; prior 0.0%) and core CPI (actual 0.2%; Briefing.com consensus 0.2%; prior 0.2%)
-- 14:00 ET: December Treasury Budget (prior -$23.20 billion)
- The Consumer Price Index (CPI) for December was right in-line with the Briefing.com consensus estimates that called for a 0.1% month-over-month decline in total CPI and a 0.2% increase in core CPI, which excludes food and energy.
- The key takeaway from the report is that it supports the Fed's born-again belief that it can be patient with its policy approach given that the core inflation trend is stable around the longer-run target at a time when data here and abroad is revealing some softening in economic activity.
- The decline in total CPI in December was fueled by the energy index, which fell 3.5% on the back of a 7.5% decline in the gasoline index. A 0.3% increase in the shelter index drove the increase in core CPI, which was offset somewhat by a 0.2% decline in the price index for used cars and trucks.
- The monthly changes left total CPI up 1.9% year-over-year, versus 2.2% in November, and core CPI up 2.2%, which was unchanged from November.
- Yield check:
- 2-yr: -3 bps to 2.54%
- 3-yr: -3 bps to 2.51%
- 5-YR: -3 bps to 2.53%
- 10-yr: -3 bps to 2.70%
- 30-yr: -1 bp to 3.04%