Morning Market Preview:
S&P futures are higher, up 22 to 23 points, as…
- The Federal Reserve Bank of Dallas is scheduled to release its manufacturing index for December, with investors paying close attention to prices paid and received as an inflation signal.
- Chinese Foreign Minister Wang Yi said Beijing will work to rebuild relations with the U.S. next year and get the relationship back on the “right course.”
- The Federal Housing Finance Agency’s house price index data for October is expected to show the cost of a home purchase contracted by 0.8% compared to September.
- Fed fund futures forecast interest rates will peak between 4.75% and 5% in May 2023 compared to the mid-November expectation of 5% to 5.25%, implying two rate hikes next year.
European markets rose as…
- European Central Bank Governing Council member Klaas Knot said it will continue raising interest rates in half-point increments before reaching peak yields in mid-summer.
- European Central Bank Executive Board member Isabel Schnabel said real interest rates are still very low and must move higher to bring inflation growth back to the 2% target.
- Russian President Vladimir Putin said Moscow is ready to negotiate in talks to end the war in Ukraine but not under terms acceptable to the opposition.
- Spain’s preliminary Consumer Price Index (“CPI”) figures for December are due out on Friday with growth expected to slow to 6.1% compared to November’s 6.8% increase.
Asian markets gained as…
- China’s National Health Commission said it would soon stop requiring inbound travelers to quarantine, boosting the outlook for the flow of trade goods and the economy.
- Bank of Japan Governor Haruhiko Kuroda insisted the recent increase in its 10-year sovereign bond yield target is not meant to exit easy-money monetary policies but to prolong them.
- Japanese retail sales data for November unexpectedly contracted as rising prices meant households spent less on clothing and other types of apparel.
- Major Chinese cities, including Zhengzhou and Beijing, said they’ve already seen new COVID infections hit 1 million per day and expect the numbers to peak in mid-January.
And ahead of…
- Wholesale Inventories for November (8:30 a.m.)
- FHFA Home Price Index for October (9 a.m.)
- S&P/Case-Shiller Composite Index for October (9 a.m.)
- Dallas Fed Manufacturing Index for December (10:30 a.m.)
Pre-Market Levels:
S&P +0.59%
Asia:
Japan's Nikkei +0.81%, Japan's TOPIX +0.64%, China's Shanghai Composite +1.63%, Hong Kong Hang Seng Index closed, South Korea's KOSPI +0.83%, Taiwan's TSE +0.40%
Europe:
EuroStoxx 50 +0.79%, UK FTSE closed, German DAX +0.72%, French CAC +0.98%, Italian MIB +0.25%, Spanish IBEX +0.28%
Currencies:
Dollar -0.19%, Japanese Yen +0.23%, Euro +0.30%, British Pound -0.13%, Swiss Franc -0.43%, Chinese Yuan -0.34%
Risk:
VIX +4.55%
Bitcoin +0.06%
Ethereum -0.31%
Growth:
WTI Crude +0.45%
Brent Crude +0.60%
Nat Gas +1.30%
Copper +2.76%
Safety:
Gold +0.64%
Silver +1.67%
Sovereign Bonds:
U.S. Treasury 10-yr yield +2.4bps at 3.77%
U.S. Treasury 2-yr yield +2.7bps at 4.35%
German 10-yr yield +10.3bps at 2.50%
French 10-yr yield +10.4bps at 3.03%
Italian 10-yr yield +9.2bps at 4.58%
Japanese 10-yr yield +8.8bps at 0.46%
Earnings:
None
Calendar:
China – Industrial Profits for November
Japan – Unemployment Rate for November
Japan – Retail Sales for November
Japan – Housing Starts for November
South Korea – Consumer Confidence for December
France – Registered Job Seekers for November (6 a.m.)
Wholesale Inventories for November (8:30 a.m.)
FHFA Home Price Index for October (9 a.m.)
S&P/Case-Shiller Composite Index for October (9 a.m.)
Dallas Fed Manufacturing Index for December (10:30 a.m.)