With a hot PPI behind us, we’re now just under 24 hours away from the US CPI report, which will be very important given how edgy bond markets have been so far this year.
Over the last week, Deutsche Bank’s Jim Reid notes that some bigger picture nervousness has been created by a few themes/data points:
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The University of Michigan 5-10yr inflation expectations (3.3%) hit their highest since 2008 on Friday,
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yesterday saw NY Fed 3-yr inflation expectations up to 3.0% (from 2.6%),
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Oil is c.+17% since early December and c.9% in 2025 so far,
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payrolls exceeded virtually all forecasts last Friday,
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and early last week we saw the spike in prices paid (64.4 from 58.2) in the ISM services report.
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