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What to Watch: ECI, PCE, MNI Chicago PMI, Month-End

MARKET INSIGHT

FI markets trading mildly lower, curves flatter with short end continuing to underperform and bonds just off late overnight lows (2s10s -1.956 at 18.154; 5s30s -1.299 at -3.174). Volume on the light side (TYM2<300k) for month end, markets await data, early equity earnings:

  • Data on tap (prior, est) at 0830ET:
    • Employment Cost Index (1.0%, 1.1%)
    • Personal Income (0.5%, 0.4%)
    • Personal Spending (0.2%, 0.6%)
    • Real Personal Spending (-0.4%, -0.1%)
    • PCE Deflator MoM (0.6%, 0.9%), YoY (6.4%, 6.7%)
    • PCE Core Deflator MoM (0.4%, 0.3%), YoY (5.4%, 5.3%), followed by
    • MNI Chicago PMI (62.9, 62.0) at 0945ET
    • U. of Mich. Sentiment (65.7, 65.7), 1000ET
  • No Treasury supply Friday, next week sees only bills:
  • US Tsy $45B 13W, $42B 26W bill auctions at 1130ET Monday
  • Stocks weaker, near overnight lows as market trims late Thu's gains: ESM2 currently at 4242.0 (-41.5) near the middle of week's range.
  • Earnings docket continues, no releases after the close: Chevron (CVX) and Exxon Mobil (XOM) missed, Bristol Myers (BMY) and Honeywell (HON) beat, waiting for AbbVie (ABBV). Supply constraints weighing on tech shares on China lockdown worries.
  • Month-end: Several large program buys noted late Thursday, month end extensions could be additional factor as Citi's model sees a rotation out of bond markets and into equities.
  • Geopol risk: Market remains alert for developments on Russia war in Ukraine, knock-on effect to markets.

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