Market Insights – April 16, 2018

April 16, 2018 Chatham Financial

Inflation Firms

View this week's rates.

Prior Week Summary

The economic news of the week was centered around the inflation landscape, with updates on consumer prices, producer prices and import costs. To start the week, the Labor Department reported that the producer price index rose 0.3% in March, after gaining 0.2% in February. Excluding the more volatile components of food and energy, prices also rose 0.3% in March, bringing the year-over-year increase to 2.7%. There were notable gains in the cost of computer hardware (5.2%), building materials (5.4%) and major household appliances (5.5%).

In a separate release, the Labor Department reported that consumer prices fell 0.1% in March, bringing the year-over-year gain to 2.4%, which was in-line with economist estimates. A substantial portion of the year-over-year increase in consumer prices was attributable to a quirk last year in the price for mobile phones. The report highlighted a 0.3% increase in housing costs, which contributes nearly 42% to the overall CPI basket, and a 0.4% increase in the cost of medical care. Overall, the strength in consumer prices seems to continue to point to a continuation of the Fed’s tightening plan.

The Look Forward

This week the market is expecting updated information on retail sales, housing starts and industrial production. There is also a full slate of Fed speakers this week, including speeches on the economic outlook by Raphael Bostic, John Williams and Charles Evans.


Rates Snapshot

Sources: Bloomberg Finance L.P., (Treasuries) Chatham Financial (Swap Curves), FHLB Boston, Chicago, Dallas, Des Moines for FHLB Advance Rates. Wells Fargo Brokered CD Indications.


Market Implied Policy Path (Overnight Indexed Swap Rates)

Source: Chatham Financial


Fixed Income Snapshot

Source: Bloomberg Finance L.P.


Chatham Hedging Advisors, LLC (CHA) is a subsidiary of Chatham Financial Corp. and provides hedge advisory, accounting and execution services related to swap transactions in the United States. CHA is registered with the Commodity Futures Trading Commission (CFTC) as a commodity trading advisor and is a member of the National Futures Association (NFA); however, neither the CFTC nor the NFA have passed upon the merits of participating in any advisory services offered by CHA. For further information, please visit
Transactions in over-the-counter derivatives (or “swaps”) have significant risks, including, but not limited to, substantial risk of loss. You should consult your own business, legal, tax and accounting advisers with respect to proposed swap transaction and you should refrain from entering into any swap transaction unless you have fully understood the terms and risks of the transaction, including the extent of your potential risk of loss. This material has been prepared by a sales or trading employee or agent of Chatham Hedging Advisors and could be deemed a solicitation for entering into a derivatives transaction. This material is not a research report prepared by Chatham Hedging Advisors. If you are not an experienced user of the derivatives markets, capable of making independent trading decisions, then you should not rely solely on this communication in making trading decisions.


Previous Article
Market Insights – April 23, 2018
Market Insights – April 23, 2018

It was a positive week for economic data led by strong retail sales, an increase in industrial production a...

Next Article
Market Insights – April 9, 2018
Market Insights – April 9, 2018

In its inaugural week of publication by the New York Federal Reserve, the SOFR rate traded with a range of ...


Subscribe to Chatham's Weekly Market Insights

First Name
Last Name
Company Name
Thank you!
Error - something went wrong!