- US December NAHB housing market index 37 vs 36 expected
- Fed's Goolsbee: We've seen significant improvement on inflation
- Canada October new housing price index -0.2% vs -0.1% expected
- Pentagon expected to announce Operation Prosperity Guardian to protect Red Sea - report
- Houthi official: US offered not to obstruct peace in Yemen for halting Red Sea attacks.
- Nikola motors founder Trevor Milton sentenced to four years in prison
- US January shale oil production seen slipping slightly
- Q3 Canadian job vacancies fell 9%
Markets:
- Gold up $7 to $2025
- WTI crude oil up $1.18 to $72.61
- US 10-year yields flat at 3.94%
- S&P 500 up 0.5% to 4796
- EUR leads, JPY lags
The yen was the laggard to start the week and some of that was a tick higher in Treasury yields but I suspect the bulk of it is worry about what the Bank of Japan may do later. Governor Ueda has developed a reputation as a bit of a wild card and with the fall in global yields, now might be an opportune time to abandon YCC completely.
On the Fed front, Chicago Fed President Goolsbee was on CNBC and asked if he would pushback on Powell's dovish message. Instead, he flipped it and pushed back on what Williams said on Friday (something that was seen as hawkish at the time); Goolsbee argued that what Williams said was no different than Powell.
In any case, we're into the time of year where flows dominate fundamentals. The dollar chopped around but did little against the euro. The commodity currencies fell despite higher commodities and better risk appetite. We're into an extremely bullish time of year for risk assets in general, so keep that in mind.
Here's a good line from Ian Lyngen at BMO that summarizes the current macro landscape:
The Fed has been stressing the narrative that monetary policy is now in a data-dependent mode; a stance with which investors
surely agree – the difference is that the market is wagering that the data breaks lower more quickly than the Committee.
Unfortunately we won't get much impactful US economic data this week.
