Daily Market Color May 10, 2017Oil Rebounds on US Stockpile Reduction While Stocks, Bonds Remain Steady After Comey Dismissal US financial markets displayed a muted reaction to the overnight political drama which resulted from the firing of former FBI Director James Comey. Official statements characterize the dismissal as a response to Comey’s actions during the 2016 investigation of Hillary Clinton’s email server, however Democrats remain skeptical since the FBI is currently probing any potential ties between President Trump and Russia. With the firing’s impact on the future of Trump’s policy agenda relatively unknown, investors proceeded with caution during the trading session. US Treasurys are near unchanged on the day after reversing a rally from earlier in the session. Contributing to the rates outlook today was Boston Federal Reserve President Eric Rosengren (non-voter), who in a prepared statement said that “along with a gradual reduction in the level of the balance sheet, it would still be reasonable to have three rate increases over the remainder of this year.” Rosengren’s hawkish views disassociated this year’s weak first quarter data from any underlying softness in the economy, finding support from last week’s robust payroll data. Major US stock indices have been similarly trading near flat for the session, with energy shares being among the top performers following a 3.5% rebound in crude oil prices. WTI crude rose to $47.60/barrel following today’s report from the Energy Information Administration (EIA) which displayed US crude stockpiles falling by 5.2 million barrels, representing the largest weekly decline of the year. A light day of economic reporting was highlighted by the Labor Department’s release of import price data during the month of April. In an encouraging sign for inflation, the price of goods imported by the US increased by 0.5% last month, exceeding expectations of a 0.1% rise. Petroleum accounted for the largest jump in costs, up 1.6%, but gains in non-fuel prices were also robust at +0.4%, representing a 10-month high. Compared to a year earlier, overall import prices are up 4.1%. The report also showed export prices rising 0.2% MoM for April, bringing the YoY change to +3%. Further clarity surrounding the inflation outlook will be provided on Friday with the release of the Consumer Price Index figures for April.