12 February 2024Deutsche BankResearch Global Economics DBDaily Date US CPI this weekCAN: Labour report (Jan): Employment up 37.3k, above mkt. NOR: CPI (Jan): Underlying at 5.3%yoy, as expectedUS equities were stronger Friday, S&P up 0.6%, ending the week 1.4% higher at a fresh record and also closing above 5,000 for the first time. US10yr yields up 2bps Friday to 4.17%, up 16bps over the week.Fed's Logan: US has seen "tremendous" progress on inflation, but "more work to do".Matt Raskin has updated his US rates forecasts in light of DB's soft new soft landing baseline for the economy. Matt sees US 10yr yields at 4.15% by the end of the year (previously 4.05%), 2yrs at 3.75% (previously 3.25%). On QT, Matt now expects FOMC will cut the pace in half around mid-year, as usage of the ONRRP facility falls below $150bn. Runoff at this slower pace should continue until reserves reach $3-3.25tn.Meanwhile, Francis Yared notes current macro pricing is broadly consistent with a soft landing outcome. As such, he rotates his existing Sofr H4/U5 flattener into a Sofr 1y forward 2s10s steepener (target 35bp, stop -10bp), which offers a balanced approach to trade the current balance of risks.Binky Chadha notes global earnings growth rose sharply in Q4 and turned positive (+5.8%) for the first time in 5 quarters, putting it back in the middle of its historical range. The bottom-up analyst consensus for Q1 2024 has been cut globally, but Europe has witnessed slightly bigger cuts than the other regions. Full year 2024 estimates have been cut the most for EM, followed by Europe, the US and Japan.Survey data points to a more rapid drop in UK wage inflation around the turn of the year. In light of that, pay data due this week should confirm a further drop in momentum, with AWE Reg Pay falling to around 6% (3m/YoY).Japan's foreign bond flows. Ioannis Sokos notes December saw net buying in all markets except for France. While both Australia and the UK saw net purchases, December was second highest net purchases in 2023 for the UK.Figure 1: Market SummaryEquitiesFX S&P5005026.610.6% EURUSD 1.07870.14% Stoxx600484.83-0.1% USDJPY149.29-0.13% FTSE7572.58-0.3% GBPUSD 1.26310.08% Nikkei22536897.420.1% USDCAD 1.34600.07% CSI3003364.930.6% AUDUSD 0.65260.32% VIX12.930.14 NZDUSD 0.61530.89%DebtCommodities UST104.170.02 Oil81.930.4% UST24.480.03 Gold2024.94-0.6% SFR44.520.04 CRB274.340.3% Copper368.75-0.4%Source : Deutsche Bank, Bloomberg Finance LPPhil OdonaghoeEconomist+61-2-8258-1606Deutsche Bank AG/SydneyIMPORTANT RESEARCH DISCLOSURES AND ANALYST CERTIFICATIONS LOCATED IN APPENDIX 1. MCI (P) 041/10/2023. UNTIL 19th MARCH 2021 INCOMPLETE DISCLOSURE INFORMATION MAY HAVE BEEN DISPLAYED, PLEASE SEE APPENDIX 1 FOR FURTHER DETAILS.US CPI this weekDistributed on: 11/02/2024 17:58:05 GMT7T2se3r0Ot6kwoPa12 February 2024DBDailyPage 2Deutsche Bank AG/SydneyGeorge Saravelos notes that with Jap...
