US 10YR FUTURE TECHS: (M5) Trend Needle Points North

This month's inflation data saw the final national CPI print revised notably to the upside (0.3ppt) driven by an upward revision to services CPI, though HICP was only marginally revised. There are two notable components within the national CPI which help to explain this.

• Starting with the broad categories there are three main differences in the weightings of CPI and HICP. The Health division within CPI is 11.1% of the total index, considerably higher than the 4.8% weight in the HICP index. The "Social Protection" group within CPI has a 5.0% weight, while in HICP it has a 2.1% weight. And games of chance are excluded from HICP but have a 1.0% weight within CPI. Other weights in HICP are correspondingly larger.
• Within Health, there are also different methodologies. In January the 'General Practice' subclass rose a notable 14.32%M/M in January 2025 versus a 0.13%M/M increase in January 2024, increasing the Y/Y rate to 16.14% Y/Y (from 1.72% in December). We estimate that this will have contributed over 0.15ppts to the increase in headline CPI. Within HICP, the category also rose firmly at 18.80% Y/Y in January, though it has seen double digit increases in Y/Y terms since May and with it's much lower weight only contributed 0.01ppts to the change in headline HICP.
• Within the Social Protection group (which is a part of the "Miscellaneous goods and services" division, the "Childcare Services" subclass was also a significant driver of CPI this month, rising 8.52% Y/Y (from 1.01% in December), which we estimate added around 0.1ppt to headline CPI. The HICP subgroup rose 2.61% Y/Y versus 1.74% Y/Y in December. With a smaller weighting in HICP this had a negligible impact.
• Given that "GP services" and "Childcare services" are the only notable differences between national CPI and HICP - and given that the former was revised a lot from the flash but the latter was not - it suggests that these two subgroups were significantly revised in national CPI in the final reading today.
• There was no notable contribution from the "Games of chance" class which falls within the "Recreation and culture" division.

Source: MNI, Insee

• EUR/USD: Feb20 $1.0400-10(E2.7bln), $1.0430-35(E3.0bln), $1.0450(E1.1bln), $1.0520-25(E1.5bln); Feb21 $1.0400(E1.5bln); Feb24 $1.0450(E1.1bln), $1.0460(E1.7bln), $1.0465-70($2.4bln)
• USD/JPY: Feb20 Y154.00($3.0bln)
• USD/CAD: Feb21 C$1.4500($1.2bln), C$1.4600($1.7bln)
• USD/CNY: Feb20 Cny7.2000($1.9bln), Cny7.2500($1.9bln), Cny7.3700($1.3bln)

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