Goldman Raises March Rate Hike Odds After January Inflation Spike

"Based on today's stronger-than-expected data--especially the CPI report's likely implications for January core PCE inflation--we are revising up our subjective probability that the next move in the federal funds rate will be a hike at the March FOMC meeting to 30% from 20% previously"

Oil BTFD Algo "Triggered" For Fourth Consecutive Week

Just as oil was set to test session lows after another massive oil build, sending US crude inventories to all time highs, many were wondering if the same exact algos that struck for the past weeks, would reappear sending oil surging on negative data would hit again. The answer: a resounding yes.

A Bloodbath Looms Over Oil Markets

Oil prices have traded reliably in the $50s per barrel since OPEC agreed to cut production last November, but having failed to break through a ceiling in the upper-$50s, crude prices are in danger of falling back again. On top of rising U.S. output, OPEC’s cuts are less impressive than they might seem.

Mortgage Delinquencies Rise Most In 7 Years As Rates Spike

For the first time since Q1 2013, mortgage delinquencies rose QoQ in Q4. The jump from 4.52% (of total loans) to 4.80% is the largest since Q1 2010 and hit as mortgage rates spiked following President Trump's election and Fed Chair Yellen's jawboning and rate-hike.

"Something Snapped" - Stocks Decouple As VIX Call Volume Explodes

As one veteran trader noted "something snapped" two days ago as VIX and US equities decoupled notably for the first time since the election. This morning VIX is surging once again (near 12) at the same time as US stocks are soaring. Most notably, VIX call volume has exploded to its highest since September as chatter of long VIX call liquidations spread across trading desks.

Industrial Production Tumbles Most In 10 Months

Despite a surge in oil and gas drilling (up 8.5% MoM), US Industrial Production tumbled 0.3% MoM - the biggest MoM drop since March 2016. Worse still, after a hope-filled bounce to a positive year-over-year in December, Industrial Production slumped to unchanged from a year ago in January.

Dollar Extends Longest Winning Streak Since 2012 As March Rate Hike Odds Surge

Following this morning's soaring inflationary and retail sales data, and following Yellen's hawkish tone yesterday, March rate-hike odds have soared from below 25% to over 40%. The Dollar Index is extending its recent winning streak on this move - now up 11 days in a row, the longest streak since May 2012.

Empire Fed Survey Soars To 30-Month Highs (Despite Slump In 'Hope')

Extending the trend of strong soft survey data, Empire Fed Manufacturing surged to its highest since September 2014 in February as Prices Paid led a surge across every sub-component. However, after spiking to its highest since 2011, 'hope' tumbled in February - its biggest drop in over a year.

January Spending Spree Has US Retail Sales Rising Most In Nearly Five Years

US consumers started off 2017 with a bang driven perhaps by optimism over Trump's new administration, as headline retail sales jumped 0.4% in the month, better than the 0.1% expected, after rising an adjusted 1.0% in December (up from 0.6%). Sales have now grown in every month since August last year.

Consumer Prices Surge At Fastest Pace In 5 Years As Real Wages Tumble

Stagflationary disaster looms. As prognosticators ohh and aah over the soaring consumer price index (up 2.5% YoY - the most since March 2012), driven by a 14.2% YoY spike in gasoline prices, it appears they missed the fact that real average weekly earnings  plunged by 0.6% YoY - the biggest wage collapse since November 2011.

Key Events In Washington Today: Trump Meets Netanyahu; Yellen Day Two

There are two key events on Washington's docket today both of which could be market moving: first Yellen continues her testimony on monetary policy in Congress, this time before the House, while President Trump is set to meet Israel's Prime Minister Netanyahu.

Frontrunning: February 15

  • World stocks at 21-month highs on Yellen, U.S. outlook (Reuters); Dollar notches longest run of gains in five years before CPI data (Reuters)
  • Nervous About the ACA, GOP Divisions Emerge Over Repeal Effort (BBG)
  • Flynn Probed by FBI Over Calls With Russian Official (WSJ)
  • Russia Questions Mount for Trump White House Reeling From Flynn Fallout (BBG)
  • Trump knew for weeks aide was misleading over Russia (Reuters)

Poison Assassination Of Kim Jong Un's Brother "Lasted About 15 Seconds"

Following yesterday's shocking news that the half-brother of North Korean dictator Kim Jong Un was assassinated, Malaysian authorities said on Wednesday that they detained a suspect in the apparent murder and are looking for a "few" other foreign suspects, as they zeroed in on the two women who police said fatally attacked him.