Image Source: PixabayGlobal Macro and Markets
Global Markets: 10Y US Treasuries had a choppy day yesterday, rising above 4% at one point, before dropping back finish at 3.916%, just 1.3bp lower than the previous day’s close. FOMC minutes showed little urgency by the FOMC to reverse the tightening that they have put in place. 2Y UST yields fell 1bp. EURUSD kept on nosing lower on Wednesday, and dropped to 1.0924. The AUD and JPY both weakened further, but GBP made slight gains against the USD. Asian FX was mostly weaker again against the USD, with the THB, MYR and TWD at the bottom of the pack. USDCNY was steadier, rising slightly to 7.1523 before moving back to just below 7.15. US stocks extended the losses of the year with a second consecutive decline. The S&P 500 lost 0.8% and the NASDAQ lost 1.18%. Equity futures look more positive, but then they also did yesterday and that turned out to be misleading. Chinese stocks also dropped again on Wednesday.
G-7 Macro: As well as the FOMC minutes, which considered starting talks about the timing of the end of quantitative tightening, yesterday also saw the release of the December manufacturing ISM index. This rose slightly, but remained in contraction territory at 47.4. The backward looking JOLTS survey showed job openings falling further, though vacancies remain large. Today, we get more PMI data for the service sector of Europe and the US, along with some preliminary European inflation numbers for December along with weekly US jobless claims figures.
China: The December Caixin PMI for the service sector is released at 0945 SGT/HKT this morning. It is expected to rise fractionally from the 51.5 November reading – consistent with slow growth of this sector.
What to look out for: Caixin service sector PMI, and US and European service sector PMIs
Fed FOMC minutes (4 January)
Japan Jibun PMI manufacturing (4 January)
China Caixin PMI services (4 January)
CPI EU Harmonized (4 January)
US S&P service PMI (4 January)
US Initial Jobless Claims (4 January)
Japan Jibun PMI services (5 January)
Singapore retail sales (5 January)
Taiwan CPI inflation (5 January)
US non-farm payrolls, ISM services, durable goods and factory orders (5 January)
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