Morning Market Preview:
S&P futures are mixed, up 1 to 2 points, as…
- Federal Reserve Governor Michelle Bowman said the central bank needs to raise interest rates further and hold them at a restrictive level for some time.
- The U.S. Treasury increased the size of upcoming bill auctions, meaning a debt-ceiling fight in Congress could be approaching sooner rather than later.
- DoubleLine Capital Chief Investment Officer Jeffrey Gundlach said the Federal Reserve is unlikely to raise interest rates above 5% despite its ‘hawkish’ rhetoric.
- The Federal Reserve Bank of Atlanta’s GDPNow forecast for the fourth quarter rose from 3.8% to 4.1% on upward revisions to private investment and personal consumption growth.
European markets gained as…
- Italian retail sales figures for November rose by 0.8% from a month earlier in November of 2022, rebounding from October's contraction as consumer spending on non-food items jumped during the holiday season.
- European Central Bank Governing Council member Mario Centeno said the central bank must continue to raise interest rates until it has inflation growth back under control.
- The Bank of England warned lenders to prepare for increased scrutiny of their lending and risk management practices due to heightening credit stress.
- European Central Bank Executive Board member Isabel Schnabel said interest rates need to rise further for monetary policy to reach a level that restricts growth.
Asian markets ended higher as…
- Australian Consumer Price Index (“CPI”) growth for November was stronger than anticipated, rising compared to October, on strength in housing and wages.
- Chinese state-run media outlet China Securities Journal said there is plenty of room for the central bank to lower lenders' reserve requirement ratios and boost borrowing and spending.
- South Korea’s unemployment rate for December jumped more than anticipated, hitting the highest level since January, as interest rate hikes weighed on economic activity.
- The People’s Bank of China's new yuan loan growth figures for December were stronger than expected as the government is encouraging banks to jumpstart economic growth.
And ahead of…
- Energy Information Administration Weekly Petroleum Inventories (10:30 a.m.)
Japan's Nikkei +1.03%, Japan's TOPIX +1.09%, China's Shanghai Composite -0.24%, Hong Kong Hang Seng Index +0.49%, South Korea's KOSPI +0.35%, Taiwan's TSE -0.35%
EuroStoxx 50 +1.06%, UK FTSE +0.64%, German DAX +1.04%, French CAC +0.97%, Italian MIB +0.55%, Spanish IBEX +0.22%
Dollar +0.16%, Japanese Yen +0.29%, Euro +0.03%, British Pound -0.27%, Swiss Franc +0.40%, Chinese Yuan -0.06%
WTI Crude +0.29%
Brent Crude +0.49%
Nat Gas +2.56%
U.S. Treasury 10-yr yield -4.1 bps at 3.58%
U.S. Treasury 2-yr yield -2.5 bps at 4.23%
German 10-yr yield -8.4 bps at 2.22%
French 10-yr yield -8.9 bps at 2.71%
Italian 10-yr yield -13.4 bps at 4.08%
Japanese 10-yr yield -0.2 bps at 0.51%
KBH and BBCP after the close.
Australia – Retail Sales for November
Australia – CPI for November
Japan – FX Reserves for December
Japan – Leading Economic Index for November
MBA 30-Year Rate and Mortgage Applications (7 a.m.)
Energy Information Administration Weekly Petroleum Inventories (10:30 a.m.)