Daily Market Color January 4, 2022Rates and COVID Cases Climb US hits record 1 million COVID cases, but 10-year Treasury yield still hits highest level in months. The U.S. hit 1 million COVID-19 cases on Monday, 95% of which are estimated to be from the Omicron variant. For now, investors appear to be looking through the daily updates and focusing on what appears to be the reduced virulence of the variant – an outlook that helped push rates higher once again today. The 10-year Treasury yield climbed another 2bps to 1.65%- the highest it’s been since November. What will the Fed minutes tell us about rate hike timing? Very little, if history is to be trusted. But we will get a sense of how united the FOMC is in accelerating the winddown of its bond purchase program. The Omicron variant will have some impact on labor market data, and the Fed could be forced to choose between combating inflation and continuing to support employment with ongoing stimulus. What else to watch for tomorrow. Fed minutes aside, it’ll be a busy day for economic data releases. Mortgage application data for the month of December will be released. ADP’s private payrolls data, a closely watched preview of Friday’s jobs report, will also be published.