Highlights of the November producer price index report:

  • Prior was +0.2%
  • PPI +1.4% vs +1.4% y/y exp
  • PPI ex food and energy 0.0% vs +0.1% m/m exp
  • Ex food, energy and trade 0.0% vs +0.1% m/m exp

Broadly in line with expectations. The big story today is the bid in bonds.

Inflation will be a major theme in 2015 and 5-year breakevens continue to fall — down another 3 bps to to 1.20% today.