The CPI (MoM) for June increased +0.3% vs. +0.4% prior, matching expectations. The core measure, which excludes food and fuel, increased +0.1% (consensus +0.2%). Year-over-yearCPI rose +2.1% and the core rose +1.9%. Rising gasoline costs accounted for two-thirds of the total increase, posting their biggest gain since June 2013. The FHFA House Price Index for May outpaced expectations (consensus +0.2%), at +0.4% after coming in flat in April. Existing home sales are expected to advance +1.9% for June following a +4.9% gain in May. The Richmond Fed Manufacturing Index for July is expected to rise to 5 vs. 3 prior. 30-Year bond yields broke and closed below their 2014 rate lows yesterday as continued tension in the Middle East and Ukraine kept the flight to quality bid. 10-Year rallyresistance ultimately held yesterday, but rates are still within striking distance of a technical breakout. Mortgages continue to outperform, tightening 2 ticks and the curve has moderately bull steepened with 2s10s up +1.3 bps.
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