Markets will be focused on inflation data this week

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Published Date 1/8/2024

The week began with rates unchanged from Friday. The economic calendar doesn’t have much until Thursday and Friday when December CPI and PPI will be released. Treasury auctioning 3s, 10s and 30s Tuesday, Wednesday, and Thursday respectively. This afternoon November consumer credit at 3 pm ET, our ongoing concern in the data is the use of credit cards (revolving credit). Increasing use of credit is a key to what consumers can be expected to do as the clock ticks; it doesn’t get many headlines although it should but isn’t going unnoticed.

The DJIA under pressure early this morning driven mostly on the decline in Boeing stock after grounding of 737-9 Max planes. The blowout of a door on Alaska Air grounded planes by United and Alaska Air, in the absence of any other major news dominated stories this morning; no one was injured.

Secretary of State Blinken meeting with United Arab Emirates President Sheikh Mohamed bin Zayed Al Nahyan and will later meet Saudi Crown Prince Mohammed bin Salman trying to get some consensus on how the Gaza Strip will be governed once the war ends.

At 9:30 am the DJIA opened -144, NASDAQ +65, S&P +9. 10 year note at 9:30 am 4.04% unchanged; FNMA 6.0 30 year coupon +5 bps from Friday’s close.

Today began quietly but by 10 am the 10 yield was declining and MBS prices +35 bps and +30 bps from 9:30 am. Any news from the mid-east isn’t likely have any noticeable impact.

This Week’s Economic Calendar:

Monday,

3 pm November consumer credit (+$9.5B from +$5.2B)

Tuesday,

6 am Dec NFIB small business optimism (90.6 unch November)

8:30 am Nov US trade deficit (-$64.8B from -$64.3B in Oct)

1 pm $52B 3 year note auction

Wednesday,

7 pm weekly MBA mortgage applications

1 pm $37B 10 year note auction

Thursday,

8:30 am weekly jobless claims (209K +7K from the prior week)

December CPI (month/month +0.2%, year/year +3.2% from 3.1% in November; core CPI month/month +0.2% from +0.3%, year/year +3.8% from 4.0%)

1 pm $21B 30 year bond auction

Friday,

8:30 am December PPI (month/month +0.2% from 0.0%, year/year +1.3% from +0.9%; core month/month +2.0% unch from November, year/year +2.0% unch from November)

Source: TBWS

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