US Price Pressures Moderate Further

• US inflation showed further signs of easing in January, with prices rising 0.2% m/m and the annual rate slowing to 2.4% from 2.7%, the lowest level since May.
• The moderation reinforces the narrative that disinflation is progressing without a sharp deterioration in activity, keeping the policy outlook biased towards further easing.
• Markets leaned into that interpretation, lifting conviction around at least two Federal Reserve cuts this year.
• Treasury yields followed the shift, with the 10-year falling 6bps to 4.05% and the 2-year declining 6bps to 3.41% as front-end expectations adjusted.
• Domestically, the week is relatively quiet, though the RBA meeting minutes on Tuesday and Q4 Wage Price Index on Wednesday will provide incremental guidance even if neither is expected to materially alter pricing.