Treasury prices are lower this morning in response to a rebound in global risk markets. Major Asian equity markets closed up more than 2% on news that Huawei’s CFO was granted bail in Canada, which is perceived as a positive for U.S./China trade negotiations.  The Euro Stoxx is up 1.6%, and S&P 500 futures are up 1.1% at the moment. While trade negotiations with China appear to be progressing in a positive way, U.S. officials are separately pursuing a series of actions against China on the technology front (malicious hacking, technology theft, etc.). While it appears that U.S. and Chinese officials are trying to keep these two issues separate (trade and tech), there is some concern in the markets that efforts on the tech front could compromise/derail any progress on trade. When the Trump Administration began announcing tariffs earlier this year, some analysts suggested this was more about curbing technology and intellectual property theft by China, and this may become more evident as events unfold in the coming weeks/months.

The November CPI report came in right on the screws relative to expectations. Headline CPI was unchanged m/m, and excluding food and energy, core prices were up 0.2% on the month. On a year-over-year basis, core CPI was up 2.2% in November, an increase from the 2.1% reading in October.

Jason Haley
Managing Director, Investment Management Group

 

Date Event Survey Actual Prior
12/10 JOLTS Job Openings 7100 7079 7009
12/11 NFIB Small Business Optimism 107 104.8 107.4
12/11 PPI Final Demand MoM 0.00% 0.10% 0.60%
12/11 PPI Ex Food and Energy MoM 0.10% 0.30% 0.50%
12/11 PPI Ex Food, Energy, Trade MoM 0.20% 0.30% 0.20%
12/11 PPI Final Demand YoY 2.50% 2.50% 2.90%
12/11 PPI Ex Food and Energy YoY 2.50% 2.70% 2.60%
12/11 PPI Ex Food, Energy, Trade YoY 2.80% 2.80%
12/12 MBA Mortgage Applications 1.60% 2.00%
12/12 CPI MoM 0.00% 0.00% 0.30%
12/12 CPI Ex Food and Energy MoM 0.20% 0.20% 0.20%
12/12 CPI YoY 2.20% 2.20% 2.50%
12/12 CPI Ex Food and Energy YoY 2.20% 2.20% 2.10%
12/12 CPI Index NSA 252.006 252.038 252.885
12/12 CPI Core Index SA 259.412 259.481 258.939
12/12 Real Avg Weekly Earnings YoY 0.50% 0.90%
12/12 Real Avg Hourly Earning YoY 0.80% 0.70%
12/12 Monthly Budget Statement -$199.0b -$100.5b
12/13 Import Price Index MoM -1.00% 0.50%
12/13 Import Price Index ex Petroleum MoM -0.10% 0.20%
12/13 Import Price Index YoY 1.30% 3.50%
12/13 Export Price Index MoM -0.30% 0.40%
12/13 Export Price Index YoY 3.10%
12/13 Initial Jobless Claims 226k 231k
12/13 Continuing Claims 1649k 1631k
12/13 Bloomberg Dec. United States Economic Survey
12/13 Bloomberg Consumer Comfort 60.3
12/14 Retail Sales Advance MoM 0.10% 0.80%
12/14 Retail Sales Ex Auto MoM 0.20% 0.70%
12/14 Retail Sales Ex Auto and Gas 0.40% 0.30%
12/14 Retail Sales Control Group 0.50% 0.30%
12/14 Industrial Production MoM 0.30% 0.10%
12/14 Capacity Utilization 78.60% 78.40%
12/14 Manufacturing (SIC) Production 0.30% 0.30%
12/14 Markit US Manufacturing PMI 55 55.3
12/14 Markit US Services PMI 54.6 54.7
12/14 Business Inventories 0.60% 0.30%