US 10y yields jump to 3.84%, new 2023 high, following hotter-than-expected US PPI data
Source: Bloomberg, HolgerZ
14 economic indicators reported this week related to the US consumer and prices. 12 of them came in above expectations.
Source: Tavi Costa, Crescat Capital
Nearly half the options on S&P 500 stocks as well as on SPY and QQQ have maturities of less than 24 hours.
Source: The Daily Shot, Nomura
No refinancing pressure yet for US high yield companies!
One of the main factors supporting US high yield is technical. The U.S. high yield market is not facing an "avalanche" of new issuance because refinancing needs are very low for 2023. Therefore, the potential negative impact of rising interest rates should be limited for U.S. high yield companies for the time being. Source: Goldman Sachs
The market no longer expects a rate cut during the summer!
While the market has been anticipating the first Federal Reserve rate cut in the summer of 2023 for the past year, improving economic growth sentiment and a still strong job market have led the market to revise its expectations. Indeed, the spread between the SOFR 3-month June and September 2023 futures turned positive yesterday, reflecting the fact that no further rate cuts are expected by the market from June to September. Source: Bloomberg
Valentine's inflation
Source: Statista
The shelter component of US CPI just had its highest 2-month increase in 33 years
Sourc: Bloomberg, Tavi Costa, Crescat Capital
A mixed US CPI report
January US CPI was inline with Street estimates on MoM basis, coming in +0.5% for the headline number and +0.4% for the core. On YoY basis, things ran bit hot, coming in +6.4% headline (down from +6.5% in December but ahead of Street estimates at +6.2%) and +5.6% for the core (down from +5.7% but ahead of St’s +5.5%. Source: Bloomberg, HolgerZ
