Markets are opening the new year with a modest risk-on tone, sending Treasury yields 5-7 basis points higher across the curve. Market depth is lighter today with both Tokyo and London markets closed for holiday (no cash Treasury trading overnight). Inflation worries remain the predominant economic theme to start 2022, and with the Fed finally retiring the “transitory” characterization, financial markets brace for less monetary accommodation (tapering) and potential tightening as soon as March or June (rate hikes). Perhaps a bigger unanswered question is the timing of Fed balance sheet reduction/normalization, which could also have a big impact on fixed income valuations. At the December press conference, Powell indicated it would be a topic of discussion in future meetings, and our base case assumption is that it would not occur in 2022 unless the Fed felt it was still well behind the inflation curve despite tapering and rate hikes. This week’s economic calendar is headlined by the Friday release of the December jobs report.
Jason Haley
Chief Investment Officer
| Date | Event | Surv(M) | Actual | Prior | Revised |
| 01/03/22 | Markit US Manufacturing PMI | 57.7 | — | 57.8 | — |
| 01/03/22 | Construction Spending MoM | 0.60% | — | 0.20% | — |
| 01/04/22 | ISM New Orders | — | — | 61.5 | — |
| 01/04/22 | ISM Prices Paid | 79.3 | — | 82.4 | — |
| 01/04/22 | ISM Manufacturing | 60.1 | — | 61.1 | — |
| 01/04/22 | ISM Employment | — | — | 53.3 | — |
| 01/04/22 | JOLTS Job Openings | 11057k | — | 11033k | — |
| 01/04/22 | Wards Total Vehicle Sales | 13.10m | — | 12.86m | — |
| 01/05/22 | MBA Mortgage Applications | — | — | -0.60% | — |
| 01/05/22 | ADP Employment Change | 400k | — | 534k | — |
| 01/05/22 | Markit US Composite PMI | — | — | 56.9 | — |
| 01/05/22 | Markit US Services PMI | 57.5 | — | 57.5 | — |
| 01/05/22 | FOMC Meeting Minutes | — | — | — | — |
| 01/06/22 | Challenger Job Cuts YoY | — | — | -77.00% | — |
| 01/06/22 | Trade Balance | -$76.5b | — | -$67.1b | — |
| 01/06/22 | Initial Jobless Claims | 195k | — | 198k | — |
| 01/06/22 | Continuing Claims | 1695k | — | 1716k | — |
| 01/06/22 | Langer Consumer Comfort | — | — | 47.9 | — |
| 01/06/22 | Factory Orders Ex Trans | — | — | 1.60% | — |
| 01/06/22 | Factory Orders | 1.50% | — | 1.00% | — |
| 01/06/22 | ISM Services Index | 67 | — | 69.1 | — |
| 01/06/22 | Durable Goods Orders | — | — | 2.50% | — |
| 01/06/22 | Durables Ex Transportation | — | — | 0.80% | — |
| 01/06/22 | Cap Goods Orders Nondef Ex Air | — | — | -0.10% | — |
| 01/06/22 | Cap Goods Ship Nondef Ex Air | — | — | 0.30% | — |
| 01/07/22 | Revisions: Employment Report — Household Survey | ||||
| 01/07/22 | Two-Month Payroll Net Revision | — | — | 82k | — |
| 01/07/22 | Change in Nonfarm Payrolls | 412k | — | 210k | — |
| 01/07/22 | Change in Private Payrolls | 372k | — | 235k | — |
| 01/07/22 | Change in Manufact. Payrolls | 33k | — | 31k | — |
| 01/07/22 | Unemployment Rate | 4.10% | — | 4.20% | — |
| 01/07/22 | Average Hourly Earnings MoM | 0.40% | — | 0.30% | — |
| 01/07/22 | Average Hourly Earnings YoY | 4.20% | — | 4.80% | — |
| 01/07/22 | Average Weekly Hours All Employees | 34.8 | — | 34.8 | — |
| 01/07/22 | Labor Force Participation Rate | 61.90% | — | 61.80% | — |
| 01/07/22 | Underemployment Rate | — | — | 7.80% | — |
| 01/07/22 | Consumer Credit | $21.000b | — | $16.897b | — |
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