Service-sector ISM key for setting the stage for payrolls

Non-manufacturing ISM is due for release at the top of the hour. Economists expect the PMI to rise to 50.5 in December. The vast bulk of the US economy is service-driven, so this data is critical for setting the stage for Friday’s employment report. Strong service sector implies improved payrolls and improved payrolls imply the Fed can begin to drain the punch bowl in the month ahead.

2-year Treasury notes head into the data at 1.03%. 10s are at 3.77%