A few things overseas and some really good economic color from the earnings calls

Japan's interest rate increase last week was again substantiated as the January Tokyo headline CPI rose 3.4% y/o/y, above the estimate of 3%. Energy had its impact for sure (also helped by lower subsidies), as did food with the core/core rate taking out both rising by 1.9% y/o/y as expected. With an overnight rate of just .50%, the BoJ has more work to do and JGB yields rose in response to the data as did inflation breakevens. The yen though is slightly lower while Japanese stocks were little changed.

30 yr chart in core/core Tokyo CPI

Following the ECB rate cut again, French CPI for January rose 1.8% y/o/y, one tenth less than forecasted but the same pace seen in December. Food prices were little changed but energy was up 2.8% y/o/y while services inflation was higher by 1.9%. As the figure was a touch light, inflation breakevens in France are falling and oat yields are as well. Germany reports its January CPI today too after releasing a soft December retail sales figure and a rise in its unemployment rate to 6.2% from 6.1% and that is the highest since October 2020 and December 2015 before then not including Covid.

While Lagarde in her presser said their deposit rate of 2.75% was still restrictive even though it compares with core inflation of 2.7%, there was 'people familiar with the matter' that said they were going to stop using the word 'restrictive' in describing where the policy rate is now. Makes sense as a ZERO real rate is clearly not restrictive.

German Unemployment Rate

Turning to the earnings call flood, and still reflecting a two lane economic highway, one fast, one slow.

From Dow: