Daily Market Color

Treasury Yields Mixed Amid BoE + ECB Tightening

Rates end the day mixed as ECB and BoE follow Fed by hiking rates. Treasury yields were mixed today, the 2-year yield rising ~3bps to 4.24% and the 10-year yield falling ~3bps to 3.45%. The move came after the ECB and BoE both raised their benchmark rates by 50bps, while the ECB warned that there will be more pain to come. Equities fell significantly during the session, the S&P 500 and NASDAQ realizing losses of 2.49% and 3.32%, respectively. 

Retail sales comes in lower than expected. Retail sales in the U.S. fell -0.6% MoM in November, much lower than both the forecast of 0.1% and last month’s level of 1.3%. Decreases in sales of furniture (-2.6%), building materials (-2.5%), and motor vehicles (-2.3%) were major contributors to the drop, which was the largest that we have seen in 2022.

Day ahead. The session will start off with preliminary December PMI data at 9:45 AM ET, which is expected to come in at 46.9, a rise from November’s level of 46.4. The rest of the day will be quieter, with no Fed commentary on the schedule.

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