OPTIONS: Expiries for Feb05 NY cut 1000ET (Source DTCC)

Bund/Schatz Swap related trade:

• DUH5 7.95k at 106.73 (suggest Payer).
• RXH5 1.36k at 13.40 (suggest Receiver).

December CPI Y/Y prints for Hesse (2.7% vs 2.0% Nov) and Rhineland-Palatinate (3.3% vs 2.7% Nov) clearly accelerated more than consensus expects for the national-level CPI due today (with the median analyst looking for 2.4% Y/Y after 2.2% in Nov). The Hesse M/M print of +0.7% was also notably higher than the national-level consensus of +0.3%.

• This means that there should be some upside risks here, but as Hesse and Rhineland-Palatinate cumulatively only account for 12.6% of the national basket, we can't put too much weight on the apparent beat just yet.
• Also, as the Hesse & R-P statistics agencies both noted some elevated uncertainty with the data on the back of a methodology update, the national agency Destatis might also be less certain on the flash print than usual. Nevertheless, focus lies on that national-level data, scheduled to be released today at 1300GMT/1400CET.
• Final data bringing some more clarity for Hesse and R-P is scheduled for Thursday, alongside releases from a wider set of other states, before the finalised national CPI release on Jan 16.
• Looking at the services prints of the two states already released, developments were mixed - there was some acceleration in Hesse but a lower print than before in Rhineland-Palatinate.

• US Data/Speaker Calendar (prior, estimate)
• 6-Jan 0915 Fed Gov Cook eco-outlook at law and economics conf (text, Q&A)
• 6-Jan 0945 S&P Global US Services PMI (58.5, 58.5)
• 6-Jan 0945 S&P Global US Composite PMI (56.6, --)
• 6-Jan 1000 Factory Orders (0.2%, -0.4%); ex-trans (0.1%, --)
• 6-Jan 1000 Durable Goods Orders (-1.1%, -0.4%); ex-trans (-0.1%, 0.3%)
• 6-Jan 1000 Cap Goods Orders Nondef Ex Air (0.7%, 0.1%)
• 6-Jan 1000 Cap Goods Ship Nondef Ex Air (0.5%,0.3%)
• 6-Jan 1130 US Tsy $84B 13W and $72B 26W bill auctions
• 6-Jan 1300 US Tsy $58B 3Y note auction (91282CMF5)