OIL: Russian government to discuss gasoline exports ban next week, sources say

Peripherals tighten further vs. Bunds in the wake of the U.S. CPI release, as the data fuels demand for carry and pushes equities higher.

• No range breaks across the major EGB/Bund spreads that we monitor.
• BTPs the outperformer, narrowing by 5.5bp on the day, taking BTP/Bunds back to 113bp.
• OATs also benefitting. French/German 10-Year yield spread 2.5bp tighter at ~79bp, threatening a break below the Dec 20 closing low, but sticking comfortably within the 75.5-88.4bp closing range in play since early December. 

Riksbank Governor Thedeen does not provide much of a signal ahead of the January meeting, noting that “at our next monetary policy meeting at the end of January, we will weigh up the information received and assess how it affects the outlook for economic activity and inflation and the policy rate”.

• As in the December meeting minutes, he re-iterates the Riksbank’s guidance that “it is likely that the interest rate will be cut once more in the first half of this year, given that our forecasts hold”.
• He notes that although the December inflation outcome was below the Riksbank's projections, "indicators of price pressures such as price plans and producer prices have risen slightly and the krona has weakened, which I think calls for some vigilance".
• Caution was also noted with respect to the international environment: "We are not isolated from developments in the United States and underlines the need for the tentative approach signalled by the Riksbank in December".
• Thedeen (alongside Deputy Governor Seim) continues to strike a more hawkish tone than other members of the Executive Board. In the December meeting minutes and commentary since, Breman, Jansson and Bunge have seemingly provided support for a January cut. Such a move is currently favoured by analysts and markets.

• US Program buyer on the open, 1960 names, the most since the 1st May, a 63 points upside opening gap for the SPX.
• Next resistance in the Cash SPX comes at 5949.34.