This will be interpreted as very good news for the Fed and will be seen as further confirmation of progress towards meeting its growth targets. At this point, we continue to expect the Fed to raise rates at the September meeting.

Cheng Chen

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There's no data, no big U.S. moves, so most of the selling off co... by Cheng Chen

There's no data, no big U.S. moves, so most of the selling off could be the flow.

The retail sales data came in weak, especially the core number and producer price data was disappointing, so the market is reacting or over reacting to that, some people may think this will push the Fed from moving again in March.

All week we've seen Treasuries overreact as stocks have plunged on oil, and that's happening today still.

Most of this is driven by the sharp decline in oil prices given that there's no major change in Fed expectations.

The strong retail sales report should go a long way in supporting September rate hike odds as the upcoming Fed decision continues to hinge crucially on the tone of domestic economic momentum.

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The constructive trend in claims in recent weeks suggests that the positive labor market trend is continuing.