S&P 500 Futures saw a slight decline approaching 3,960 following a bleak Wall Street close last Friday. This was followed by US Treasury yields strengthening at 3.58%. Notably, the 2-year US Treasury yield reached 4.35%. The market started an important week with several negative notes due to recession concerns. However, the risk-off sentiment failed to capture much attention amid a light calendar with various existing worries.

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S&P 500 Futures, US Treasury, Fed News Points:

In addition to the Treasury yield curve data, which reflected recession fears, stronger US data recently also weighed on market sentiment, the US Treasury Secretary commented. Based on the latest US data, PPI matched market estimates of 7.4% YoY for November and rose from the previous reading of 8.1%. Core PPI rose to 6.2% YoY from the initial estimate of 6.0% and the previous reading of 6.7%.

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In addition, the preliminary reading of the University of Michigan Consumer Sentiment Index rose to 59.1% for December, compared to the market forecast of only 53.3%, with the final reading for November at 56.8%. Inflation expectations for the next year decreased to around 4.6%, the lowest since September 2021, compared to the previous expectation of 4.9%, while the 5-10 year expectation remained stable at 3.0%. It is also worth noting that the US ISM PMI increased to 56.5%, compared to the previous forecast of 54.4.

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US Treasury Secretary Janet Yellen responded by acknowledging the risk of a recession, but emphasized that it is not necessary to curb inflation. It is worth noting that the recent gradual easing of lockdowns and China's Zero-Covid policy are challenging the markets ahead of US inflation data and the Federal Reserve's monetary policy meeting. Additionally, the preliminary PMI readings for December and the monetary policy meetings of the ECB and BoE are also important events, providing clear direction for market participants. Elon Musk Sends Crypto Spammers into a Panic! Here’s the Legal Penalty. Stay tuned for more Forex news today only on the GIC Journal.