Yield Curve Update (Reflation vs. Stagflation)

What’s in Today’s Report:

  • Yield Curve Update (Reflation vs. Stagflation)
  • EIA and Oil Market Update

Futures are little changed following a generally quiet night of news.

Economic data was slightly underwhelming as UK Industrial Production (-0.7% vs. (E) 0.3%) and Euro Zone IP (-0.3% vs. (E) -0.2%) both missed estimates, although neither is weighing materially on markets.

Covid headlines remained largely unchanged, although Hawaii is reimposing restrictions on social gatherings.  But, that headline isn’t enough to weigh on markets broadly, as the broad response to rising cases remains mask mandates and increased vaccinations (which aren’t material headwinds on the recovery yet).

Today focus will be on Jobless Claims (E: 378K) and markets will want to see the number continue to gradually decline (but not drop so fast that it makes the Fed taper more quickly).  We also get Final PPI (E: 0.6% m/m, 7.3% y/y) but given yesterday’s CPI wasn’t hotter than expected, PPI shouldn’t move markets.