MNI US OPEN: Post-FOMC Minutes Bond Weakness Continues

MNI: SAXONY DEC CPI +0.5% M/M, +5.1% Y/Y; NOV +5.0% Y/Y

MNI: EZ NOV PPI +1.8% M/M, +23.7% Y/Y; OCT +21.9% Y/Y

EZ November PPI pace slows, record annual highs continue

EUROZONE PPI for November +1.8% m/m, +23.7% y/y (previous 5.4% m/m; 21.9% y/y)

• Eurozone factory gate inflation continued to soar in November, albeit at a significantly reduced pace on the month.
• Energy prices jumped by 3.5%, intermediate goods by 1.5%, durable and non-durable consumer goods by 0.5% and 0.6% from October to November 2021.
• Energy prices continue to be a key driver of inflationary pressure, rising an impressive 66.0% in November 2021 compared to the previous year.
• Monthly core PPI came in at +0.9%.
• Ireland saw the strongest annual factory gate inflation jump in the Eurozone, hitting +87.9% in November 2021.

MNI: GERMANY NOV IND ORD +3.7% M/M, 1.3% Y/Y; OCT -5.8%r M/M

UK Final Services PMI for December 53.6 (53.2 flash, 58.5 previous)

FIXED INCOME: Follow through from hawkish Fed and higher German inflation weigh on FI

After yesterday's more hawkish FOMC Minutes (both in terms of the potential for a near-term hike and the potential for faster balance sheet unwind) core fixed income markets are coming under some pressure this morning.

• German state CPI data has come in higher than generally expected with M/M prints ranging from 0.5-0.7% so far. The comparable national print was expected to increase 0.4%M/M while HICP is expected to rise 0.2%M/M. Eurozone PPI data was also stronger than expected.
• The higher inflation prints are likely to be spooking the market ahead of tomorrow's Eurozone CPI print with EGB spreads widening, notably in France, Ireland, Spain and Italy.
• TY1 futures are down -0-8+ today at 128-18+ with 10y UST yields up 2.4bp at 1.731% and 2y yields up 3.1bp at 0.860%.
• Bund futures are down -0.53 today at 170.22 with 10y Bund yields up 3.1bp at -0.96% and Schatz yields up 1.5bp at -0.611%.
• Gilt futures are down -0.53 today at 123.39 with 10y yields up 4.8bp at 1.134% and 2y yields up 3.3bp at 0.786%.

FOREX: Greenback Extending Gains Post-Minutes

• The greenback trades firmer this morning, extending the move post-FOMC minutes, which the markets interpreted hawkishly after the Fed strongly suggested the removal of stimulus could accelerate in the coming months. The USD's gains are more notable against growth proxy and commodity tied currencies, with AUD and NZD at the bottom-end of the G10 table.
• AUD/USD's downtick Thursday puts the pair short of a firm break above the 50-dma - and the rejection could mark the beginning of a bearish reversal that initially targets 0.7082 ahead of 0.6993. NZD is trading similarly poorly, but NZD/USD holds clear of key support at 0.6703 for now.
• Equity markets remain the focus for risk sentiment. There's been very little bounce for the in focus tech sector pre-market, with the NASDAQ future indicating another negative open on Wall Street later today. The e-mini S&P and DJIA futures are faring slightly better, but all still remain well shy of yesterday's best levels.
• ISM Services Index takes focus going forward, with markets on watch for the prices subcomponent after the manufacturing ISM data earlier in the week dropped sharply. Final German CPI numbers also cross as well as weekly jobless claims. Fed's Daly and Bullard make up the speaker slate.

EQUITIES: Tech Stocks Continue To Lead Way Lower

• Asian markets closed mixed: Japan's NIKKEI closed down 844.29 pts or -2.88% at 28487.87 and the TOPIX ended 42.26 pts lower or -2.07% at 1997.01. China's SHANGHAI closed down 9.097 pts or -0.25% at 3586.079 and the HANG SENG ended 165.61 pts higher or +0.72% at 23072.86
• European stocks are under a bit of pressure, with the German Dax down 158.37 pts or -0.97% at 16271.75, FTSE 100 down 55.24 pts or -0.73% at 7516.87, CAC 40 down 84.88 pts or -1.15% at 7376.37 and Euro Stoxx 50 down 51.93 pts or -1.18% at 4392.15.
• U.S. futures are mixed, with tech underperforming: Dow Jones mini up 45 pts or +0.12% at 36336, S&P 500 mini up 1.75 pts or +0.04% at 4694.25, NASDAQ mini down 21.75 pts or -0.14% at 15744.75.

COMMODITIES: Precious Metals Dive After Fed Seen Hawkish

• WTI Crude up $0.41 or +0.53% at $78.1
• Natural Gas down $0.03 or -0.72% at $3.841
• Gold spot down $16.15 or -0.89% at $1800.17
• Copper down $6.7 or -1.52% at $433.6
• Silver down $0.59 or -2.59% at $22.2078
• Platinum down $12.3 or -1.25% at $972.58