Daily Market Color December 12, 2022Bonds Sell-Off Ahead of CPI Data Treasury yields rise ahead of Tuesday CPI data. Bonds sold off today as investors await tomorrow’s CPI data, the 2-year and 10-year yields rising ~3bps after starting the session lower. Equities underwent a significant rally, the S&P 500 and NASDAQ rising ~1.43% and 1.26%, respectively. More of the same could be seen tomorrow, as the most recent CPI release fueled a 5.5% daily boost for the S&P 500, its best post-CPI move ever. Previewing CPI. The U.S. annual CPI is expected to slow for the fifth straight month to 7.3% in November, which would be the lowest mark since last December. The data is under the microscope as the December FOMC meeting begins tomorrow. The Fed is widely expected to hike rates by 50bps, but may signal a higher terminal rate, which markets are currently pricing in at ~5%. Day ahead. The December FOMC meeting begins tomorrow, which the Fed will follow with a rate hike decision on Wednesday. CPI will be released at 8:30 AM ET tomorrow.
