MNI ASIA OPEN: Focus on Jan CPI Annual Revisions
EXECUTIVE SUMMARY
- MNI US INFLATION: More Residual Seasonality In Store For CPI
- US: US Will Sell Venezuela Oil to China, Trump’s Energy Boss Says, Bbg
- MNI US DATA: Existing Home Sales Pull Back, Activity Still Thawing Slowly
- MNI US DATA: Initial Claims Off Recent Lows, Continuing Still Lower Than 2H25
US
MNI US INFLATION: More Residual Seasonality In Store For CPI
The following is taken from the MNI US CPI Preview, which can be found in full here.
- January is always an important month for CPI inflation as it begins to capture start-of-year price resets.
- Historically about 20% of net price increases for the core basket over the year come in January and sometimes close to another 20% in February. This share dropped significantly in 2021 and 2022, when price increases where more spread out across the year in a period of high inflation, but we have seen some normalization since with Jan 2025 ultimately accounting for 21.6% of 2025 price increases.
- Seasonal adjustment processes have struggled with these swings in pricing behavior and appear to have helped see “residual seasonality” in the inflation data where the adjustment process doesn’t fully eradicate early year strength.
- We suspect that should be less of a factor this year compared to last year’s January release but it’s still likely at play and is noted by various analysts. Expect any modest upside surprises to be flagged in this light.
NEWS
US TRUMP: OUR RELATIONSHIP WITH CHINA IS VERY GOOD RIGHT NOW, Bbg
US: US Will Sell Venezuela Oil to China, Trump’s Energy Boss Says, Bbg
MNI US: European Allies Increasingly View US As Unreliable Partner
A new survey from Politico has found that US President Donald Trump’s, “efforts to rewrite longstanding international relationships — particularly in Europe — are repelling longtime, traditionally loyal partners.” Politico notes, “Across all countries polled, far more people described the US as an unreliable ally than a reliable one, including half the adults polled in Germany and 57 percent in Canada. In France, too, the share of people who called the US unreliable was more than double the share who said it was reliable.
MNI SECURITY: Netanyahu Says US-Iran Nuclear Deal Must Cover Ballistics/Proxies
Israeli Prime Minister Benjamin Netanyahu told reporters that a potential US nuclear deal with Iran must cover its ballistic missile programme and support for regional proxies, per Barak Ravid at Axios.
MNI US: Trump To Announce Rescission Of Obama-Era Climate Finding Shortly
US President Donald Trump is shortly due to join Environmental Protection Agency Administrator Lee Zeldin at the White House to announce that the administration will no longer adhere to an Obama-era scientific finding that has underpinned US climate policy since 2009. White House press secretary Karoline Leavitt said Tuesday, “This will be the largest deregulatory action in American history.”
MNI US: Congress Heading Toward DHS Shutdown On Friday
Congress appears to be barreling towards a shutdown of the Department of Homeland Security on Friday, after Democrats panned a White House counteroffer for reforms to immigration enforcement operations. Manu Raju at CNN reports, "Democrats are unlikely to accept a new White House offer ... unless something dramatically changes, I’m told."
MNI US-RUSSIA: Memo Suggests Potential Return To Dollar System - Bloomberg
Bloomberg reports on a internal Russian document, which includes excerpts on "Russia’s return to the dollar settlement system, including possibly for Russian energy transactions. The Kremlin has set out proposals that could see Russia embrace the dollar again as part of a wide-ranging economic partnership with the Trump administration, according to an internal Russian document reviewed by Bloomberg."
US TSYS
MNI US TSYS: Risk Sentiment Sours Ahead Friday's CPI Annual Revisions
- Treasuries drifting near late Thursday session highs, indeed the best levels since mid-December as risk sentiment on stocks soured earlier.
- Stocks reversed early Thursday gains and look to finish near the lowest levels of the week as increased capital expenditures weighed on computer software and services. Additionally, Financials underperformed as Bitcoin retreated 2%, as did mining stocks as Gold shed appr $150.0/oz.
- Treasury futures extended highs (USH6 +1-06 at 117-09) after the $25B 30Y auction (912810UR7) stopped through: 4.750% high yield vs. 4.772% WI; bid-to-cover at 2.66x vs. 2.42x prior. Primary dealer take-up retreats to record low of 5.88% vs. 11.59% prior.
- USD index holding close to unchanged levels on the session and EURUSD holding a very contained 38pip range. Most notable adjustments are being seen for AUD crosses, with the likes of AUDCHF and AUDJPY declining close to 1%, although the price action has had a sense of relative stability compared to other asset classes throughout the period of waning sentiment.
- Earlier, Weekly jobless claims surprised a little higher on both an initial and continuing basis. Initial claims still dipped a little after last week’s surprisingly large increase in what looks like a reversal of weather disruption, although residual seasonality more broadly looks to explain recent trends (both lower and now higher).
- Focus turns to Friday's Eurozone GDP, labour market and trade data as well as appearances by BOE's Pill, while the global focus will be on the US CPI release.
OVERNIGHT DATA
MNI US DATA: Initial Claims Off Recent Lows, Continuing Still Lower Than 2H25
Weekly jobless claims surprised a little higher on both an initial and continuing basis. Initial claims still dipped a little after last week’s surprisingly large increase in what looks like a reversal of weather disruption, although residual seasonality more broadly looks to explain recent trends (both lower and now higher).
- Initial claims were a little higher than expected at 227k (sa, cons 223k) in the week to Feb 7 after a marginally upward revised 232k (initial 231k). Continuing claims were also a little higher than expected at 1862k (sa, cons 1850k) in the week to Jan 31 after a marginally downward revised 1841k (initial 1844k).
MNI US DATA: Existing Home Sales Pull Back, Activity Still Thawing Slowly
Weakness in existing home sales in January look to have been partly driven by bad weather, but it's not totally unexpected given that the drop was presaged by a pullback in pending sales. Sales came in at 3.91M SAAR, down from 4.27M in December and below the 4.15M expected for the worst monthly figure since September 2024.
MARKETS SNAPSHOT
Key market levels of markets in late NY trade:
DJIA down 533.73 points (-1.06%) at 49602.45
S&P E-Mini Future down 94 points (-1.35%) at 6868
Nasdaq down 445.6 points (-1.9%) at 22629.17
US 10-Yr yield is down 7.1 bps at 4.1019%
US Mar 10-Yr futures are up 16/32 at 112-25
EURUSD down 0.0005 (-0.04%) at 1.1867
USDJPY down 0.38 (-0.25%) at 152.89
WTI Crude Oil (front-month) down $1.76 (-2.72%) at $62.87
Gold is down $165.98 (-3.26%) at $4918.60
European bourses closing levels:
EuroStoxx 50 down 24.35 points (-0.4%) at 6011.29
FTSE 100 down 69.67 points (-0.67%) at 10402.44
German DAX down 3.46 points (-0.01%) at 24852.69
French CAC 40 up 27.32 points (0.33%) at 8340.56
US TREASURY FUTURES CLOSE
Curve update:
3M10Y -6.494, 41.102 (L: 40.394 / H: 48.125)
2Y10Y -2.067, 63.771 (L: 63.18 / H: 67.371)
2Y30Y -2.855, 126.465 (L: 125.843 / H: 130.868)
5Y30Y -0.024, 106.242 (L: 104.876 / H: 109.332)
Current futures levels:
Mar 2-Yr futures up 2.625/32 at 104-11 (L: 104-08.125 / H: 104-11.5)
Mar 5-Yr futures up 9.75/32 at 109-14 (L: 109-03 / H: 109-14.5)
Mar 10-Yr futures up 16/32 at 112-25 (L: 112-07.5 / H: 112-27)
Mar 30-Yr futures up 1-06/32 at 117-9 (L: 116-00 / H: 117-11)
Mar Ultra futures up 1-19/32 at 120-5 (L: 118-14 / H: 120-07)
MNI US 10YR FUTURE TECHS: (H6) Bullish Phase
- RES 4: 113-04 76.4% retracement of the Nov 25 - Jan 20 bear leg
- RES 3: 112-31 High Dec 18 and key short-term resistance
- RES 2: 112-25 61.8% retracement of the Nov 25 - Jan 20 bear leg
- RES 1: 112-23+ High Feb 12
- PRICE: 112-21+ @ 17:35 GMT Feb 12
- SUP 1: 112-01 20-day EMA
- SUP 2: 111-26 Low Feb 9
- SUP 3: 111-13+ Low Feb 3
- SUP 4: 111-09 Low Jan 20 and the bear trigger
Treasuries continue to trade closer to their recent highs and the current bull cycle remains intact. This week’s gains have strengthened the short-term uptrend, signalling scope for a move towards 112-25 next, the 61.8% retracement of the Nov 25 - Jan 20 bear leg. Clearance of this price point would open 112-31, the Dec 18 high. Initial support to watch is 112-01, the 20-day EMA. A break of this level would highlight a potential reversal.
SOFR FUTURES CLOSE
Current White pack (Mar 26-Dec 26):
Mar 26 +0.010 at 96.370
Jun 26 +0.020 at 96.570
Sep 26 +0.035 at 96.790
Dec 26 +0.055 at 96.895
Red Pack (Mar 27-Dec 27) +0.070 to +0.085
Green Pack (Mar 28-Dec 28) +0.085 to +0.090
Blue Pack (Mar 29-Dec 29) +0.095 to +0.10
Gold Pack (Mar 30-Dec 30) +0.095 to +0.10
REFERENCE RATES
US TSYS: Repo Reference Rates
- Secured Overnight Financing Rate (SOFR): 3.65% (+0.00), volume: $3.167T
- Broad General Collateral Rate (BGCR): 3.62% (-0.01), volume: $1.333T
- Tri-Party General Collateral Rate (TCR): 3.62% (-0.01), volume: $1.312T
- (rate, volume levels reflect prior session)
STIR: FRBNY EFFR for prior session:
- Daily Effective Fed Funds Rate: 3.64% (+0.00), volume: $101B
- Daily Overnight Bank Funding Rate: 3.63% (+0.00), volume: $202B
FED Reverse Repo Operation
RRP usage rises to $2.844B with 10 counterparties this afternoon vs. $1.048B Wednesday. Compares to December 12 low of $0.838B (lowest level since mid-March 2021); this years highest excess liquidity measure: $460.731B on June 30.
MNI PIPELINE: Corporate Bond Roundup: Citadel, Royal Caribbean, Tract Cap on Tap
- Date $MM Issuer (Priced *, Launch #)
- 02/12 $3.65B Tract Capital 5NC2 6%a
- 02/12 $Benchmark Citadel Finance 3Y +170a, 5Y +195a
- 02/12 $Benchmark Royal Caribbean 7Y +125a, 12Y +150a
- $2.1B Priced Wednesday, $47.7B/wk
MNI BONDS: EGBs-GILTS CASH CLOSE: Long-End Rally Continues In Risk-Off Session
European yields continued to descend Thursday in a risk-off session, with long-end cash instruments gaining for a 3rd consecutive day.
- A sharp pullback in global equities starting in the middle of European afternoon trade helped early EGB and Gilt gains extend into the cash close.
- While core instruments gained, with Gilts outperforming Bunds across the curve, periphery/semi-core EGB spreads largely held in despite the flight to safety.
- In data, UK December monthly GDP printed in line with consensus at 0.1% M/M - entirely services-driven - however downward revisions were also due to services - which left Q4 growth weaker than expected at 0.1% Q/Q (vs 0.2% cons).
- Markets didn't react as the data weren't seen having much impact on BOE policy, with MPC's Breeden reiterating that it's "reasonable to expect" a cut in March or April. Even so, on the day 2Y UK yields fell to a post-Aug 2024 low as part of the broader rally.
- The German and UK curves leaned bull flatter. Semi-core EGBs outperformed periphary instruments, with Spain/Portugal underperformers.
- Friday brings Eurozone GDP, labour market and trade data as well as appearances by BOE's Pill, while the global focus will be on the US CPI release.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 0.6bps at 2.06%, 5-Yr is down 1.3bps at 2.365%, 10-Yr is down 1.3bps at 2.779%, and 30-Yr is down 0.7bps at 3.449%.
- UK: The 2-Yr yield is down 2.1bps at 3.603%, 5-Yr is down 2bps at 3.855%, 10-Yr is down 2.4bps at 4.452%, and 30-Yr is down 2.7bps at 5.258%.
- Italian BTP spread unchanged at 60.5bps / French OAT spread down 1bps at 58bps
MNI FOREX: AUD Only Moderately Corrects Lower Amid Broader Risk Selloff
- Sharp risk off sentiment has been on show across global markets Thursday, with pressure most notable across the equity, precious metal and crypto complexes. Despite this, major currencies have taken the developments in their stride, with the USD index holding close to unchanged levels on the session and EURUSD holding a very contained 38pip range.
- Most notable adjustments are being seen for AUD crosses, with the likes of AUDCHF and AUDJPY declining close to 1%, although the price action has had a sense of relative stability compared to other asset classes throughout the period of waning sentiment. Indeed, given the Australian dollar’s impressive performance across 2026 so far, the corrections are very moderate at this stage.
- Japanese yen volatility continues to be the most interesting aspect of the G10 currency markets this week, following the Japanese election on Sunday.
- Given the magnitude of the USDJPY move, it is perhaps unsurprising to see the pair generate some demand in the low 152’s, with the 3.5% decline in just four sessions falling just shy of 152.10 support, and the technical bear trigger. A solid turnaround from the 152.27 lows prompted a 153.76 session high over the NY crossover, however, spot has subsequently consolidated back below the 153 mark.
- If the price action following yesterday’s US employment report is anything to go by, the pair’s inability to consolidate any meaningful upward momentum could be a sign that further downside is imminent. The gap to the pre-October election lows is at 147.47
- Swiss Franc resilience has resumed today, with EURCHF seeing a renewed push back towards 0.91, narrowing the gap to Tuesday’s cycle lows at 0.9095. The overall bearish dollar narrative is also weighing notably on USDCHF, which edges closer to cycle lows, located 0.7605.
- Markets will await inflation data from both Switzerland and the US on Friday. Eurozone flash GDP data will also be released.
FRIDAY DATA CALENDAR
| Date | GMT/Local | Impact | Country | Event |
| 13/02/2026 | 0700/0800 | * |  DE | Wholesale Prices |
| 13/02/2026 | 0730/0830 | *** |  CH | CPI |
| 13/02/2026 | 0800/0900 | *** |  ES | HICP (f) |
| 13/02/2026 | 1000/1100 | *** |  EU | EZ GDP 2nd (Flash) |
| 13/02/2026 | 1000/1100 | * | EU | Employment |
| 13/02/2026 | 1000/1100 | * | EU | Trade Balance |
| 13/02/2026 | 1000/1100 | EU | ECB's de Guindos Lecture At Academia Europea Leadership | |
| 13/02/2026 | 1200/1300 | EU | ECB's de Guindos Remarks and Q&A At Círculo de Confianza | |
| 13/02/2026 | 1200/1200 |  GB | BOE's Pill Fireside Chat At Santander Macro Event | |
| 13/02/2026 | - | GB | BOE MPG Minutes Released | |
| 13/02/2026 | - | *** |  CN | New Loans |
| 13/02/2026 | - | *** | CN | Money Supply |
| 13/02/2026 | - | *** | CN | Social Financing |
| 13/02/2026 | 1330/0830 | *** |  US | CPI |
| 13/02/2026 | 1330/0830 | *** | US | CPI |
| 13/02/2026 | 1330/0830 | *** | US | CPI |
| 13/02/2026 | 1330/0830 | ** | US | US CPI Annual Revised |
| 13/02/2026 | 1330/0830 | *** | US | CPI |
| 13/02/2026 | 1800/1300 | ** | US | Baker Hughes Rig Count Overview - Weekly |
| 13/02/2026 | 1800/1300 | ** | US | Baker Hughes Rig Count Overview - Weekly |
| 13/02/2026 | 1800/1300 | ** | US | Baker Hughes Rig Count Overview - Weekly |
