Morning Market Preview:
S&P futures are lower, down 17 to 18 points, as…
- Investors await a speech later this morning by Federal Reserve Chairman Jerome Powell about central bank independence for clues on future interest rate intentions.
- Federal Reserve Bank of San Francisco President Mary Daly said she expects the central bank to pause interest rate hikes once the federal funds target range is above 5%.
- Federal Reserve Bank of Atlanta President Raphael Bostic said he expects interest rates to be above 5% by early in the second quarter and remain there for a “long time.’
- The Federal Reserve Bank of New York’s inflation expectations survey showed that the short-term outlook is declining while the medium-term picture remains unchanged.
European markets weakened as…
- French industrial production figures for November increased as activity returned to normal following strikes in October that caused a fall in production, however headwinds remain from high energy prices and weakening global demand.
- European Union and U.K. trade negotiators made headway on improving their economic relationship after agreeing on how to track goods moving from Great Britain to Northern Ireland.
- Bank of England Chief Economist Huw Pill said it's beginning to see signs inflation growth is easing, signaling the potential for a shift in interest rate policies.
- The European Central Bank said it expects regional wage growth to remain very strong over the next few quarters, necessitating additional interest rate hikes.
Asian markets ended mixed as…
- Tokyo’s Consumer Price Index (“CPI”) growth for December hit the highest level since 1982, increasing pressure on the Bank of Japan to raise interest rates.
- Chinese Provincial Health Commission Director Kan Quancheng said some of the most populated provinces have passed peak COVID cases as 89% of residents have been infected.
- Japanese Prime Minister Fumio Kishida and French President Emmanuel Macron pledged to increase security cooperation in Asia, potentially stoking political tensions with China.
- The People’s Bank of China’s Shanghai branch said it would offer more financial support to the district’s property market in an attempt to bolster economic growth.
And ahead of…
- Fed’s Powell Speaks (9 a.m.)
- Wholesale Inventories (Final) for November (10 a.m.)
- American Petroleum Institute Crude Oil Inventory Data (4:30 p.m.)
Pre-Market Levels:
S&P -0.44%
Asia:
Japan's Nikkei +0.78%, Japan's TOPIX +0.28%, China's Shanghai Composite -0.21%, Hong Kong Hang Seng Index -0.27%, South Korea's KOSPI +0.05%, Taiwan's TSE +0.34%
Europe:
EuroStoxx 50 -0.51%, UK FTSE -0.18%, German DAX -0.50%, French CAC -0.74%, Italian MIB -0.20%, Spanish IBEX -0.02%
Currencies:
Dollar +0.16%, Japanese Yen +0.23%, Euro -0.05%, British Pound -0.34%, Swiss Franc +0.10%, Chinese Yuan +0.13%
Risk:
VIX +2.09%
Bitcoin +0.06%
Ethereum +0.37%
Growth:
WTI Crude +0.42%
Brent Crude +0.33%
Nat Gas -3.25%
Copper -0.34%
Safety:
Gold -0.04%
Silver -1.03%
Sovereign Bonds:
U.S. Treasury 10-yr yield +5.0 bps at 3.57%
U.S. Treasury 2-yr yield +4.6 bps at 4.25%
German 10-yr yield +7.1 bps at 2.29%
French 10-yr yield +7.7 bps at 2.79%
Italian 10-yr yield +7.8 bps at 4.25%
Japanese 10-yr yield +0.8 bps at 0.51%
Earnings:
BBBY, ACI, and SNX before the open.
NOTV and SAR after the close.
Calendar:
Japan – CPI for December
Japan – Real Household Consumption Expenditure for November
France – Industrial, Manufacturing Production for November (2:45 a.m.)
ECB’s Schnabel Speaks (5:10 a.m.)
NFIB Small Business Index for December (6 a.m.)
Fed’s Powell Speaks (9 a.m.)
Wholesale Inventories (Final) for November (10 a.m.)
American Petroleum Institute Crude Oil Inventory Data (4:30 p.m.)