Treasury prices were slightly lower overnight despite broad weakness in Asian and European equities. The sell-off in Asia is due to a combination of weaker economic data (Japan GDP), as well as a follow-through to the poor finish to U.S. equities on Friday (S&P 500 -2.3%). U.S. equity futures are more resilient today (at least for now), with all three major indices in positive territory. Analysts have looked for a rebound in U.S. risk markets following the trade cease-fire with China and Powell’s dovish pivot, but investors remain anxious. The potential tailwind from the U.S./China trade truce appears to be largely offset by perceived complications following the arrest of Huawei’s CFO last week, and perhaps market participants are waiting to see what the Fed does on December 19. Either way, trading volumes across asset classes should decline as December progresses, which would further fuel volatile price action.

This week’s economic calendar is headlined by the November CPI report (Wednesday) and November retail sales data (Friday). The Fed has entered the blackout period ahead of the 12/19 meeting, so their will be no Fed speakers this week.

Jason Haley
Managing Director, Investment Management Group


12/10JOLTS Job Openings71007009
12/11NFIB Small Business Optimism107107.4
12/11PPI Final Demand MoM0.00%0.60%
12/11PPI Ex Food and Energy MoM0.10%0.50%
12/11PPI Ex Food, Energy, Trade MoM0.20%0.20%
12/11PPI Final Demand YoY2.50%2.90%
12/11PPI Ex Food and Energy YoY2.50%2.60%
12/11PPI Ex Food, Energy, Trade YoY2.80%
12/12MBA Mortgage Applications2.00%
12/12CPI MoM0.00%0.30%
12/12CPI Ex Food and Energy MoM0.20%0.20%
12/12CPI YoY2.20%2.50%
12/12CPI Ex Food and Energy YoY2.20%2.10%
12/12CPI Index NSA252252.885
12/12CPI Core Index SA259.401258.939
12/12Real Avg Weekly Earnings YoY0.90%
12/12Real Avg Hourly Earning YoY0.70%
12/12Monthly Budget Statement-$196.0b-$100.5b
12/13Import Price Index MoM-1.00%0.50%
12/13Import Price Index ex Petroleum MoM-0.10%0.20%
12/13Import Price Index YoY1.30%3.50%
12/13Export Price Index MoM-0.30%0.40%
12/13Export Price Index YoY3.10%
12/13Initial Jobless Claims227k231k
12/13Continuing Claims1649k1631k
12/13Bloomberg Dec. United States Economic Survey
12/13Bloomberg Consumer Comfort60.3
12/14Retail Sales Advance MoM0.10%0.80%
12/14Retail Sales Ex Auto MoM0.20%0.70%
12/14Retail Sales Ex Auto and Gas0.40%0.30%
12/14Retail Sales Control Group0.50%0.30%
12/14Industrial Production MoM0.30%0.10%
12/14Capacity Utilization78.60%78.40%
12/14Manufacturing (SIC) Production0.30%0.30%
12/14Markit US Manufacturing PMI55.155.3
12/14Markit US Services PMI54.654.7
12/14Business Inventories0.60%0.30%