- US initial jobless claims 190K versus 195K estimate
- Fed Waller: FOMC may need to raise rates beyond December's 5.1-5.4% central tendency view
- Fed's Bostic: Fed may have to do more given high inflation
- Fed's Collins: Number of additional hikes will be determined by incoming data
- US EIA weekly natural gas inventories -81bcf vs -75bcf expected
- BOE's Pill: Some high-frequency indicators of wages have fallen quite sharply recently
- Blinken: Were China to provide 'material' lethal support for Russia, it would be a problem
- US Q4 unit labor costs +3.2% vs +1.6% expected
Markets:
- Gold flat at $1835
- US 10-year yields up 6.6 bps to 4.06%
- WTI crude oil up 19-cents to $77.88
- S&P 500 up 30 points to 3981
- USD leads, NZD lags
The US dollar started the day out strong, and for good reason as US Treasury yields pushed the range higher with US 10s stretching to 4.09% and 2s making a challenge of 5% before backing off. Despite that, the dollar bulls didn't really push beyond European ranges, which might have raised some nerves.
At the same time, equities were able to impressively shrug off the higher rates in a sign that some may be scaling into the next trade, which is presumably a top for yields. The numbers weren't exactly cooperative for that as initial jobless claims stayed low and unit labor costs were higher than expected.
The real lifeline for the dollar bears came later as the Fed's Bostic took a more dovish tone. That helped risk trades further and led to more modest dollar selling. Ultimately though, it was another solid day for the dollar and wiped out some of the recent retracement. Late in the day, the comments from Waller hit and they were hawkish, though the market took them in stride.
Friday features the ISM services index and that will set up the next leg of trading.
