Michael M. Santiago/Getty Images News
Stock index futures were noncommittal as Wall Street awaited a bevy of economic numbers and more quarterly results.
S&P futures (SPX), Nasdaq 100 futures (NDX:IND) and Dow futures (INDU) hovered just above the unchanged line.
“The big news overnight is that there is no big news overnight as the BoJ met economists expectation that they wouldn’t change anything on YCC today despite increasing market expectation that they would,” Deutsche Bank’s Jim Reid wrote. “The policy does seems unsustainable if current conditions persist though as since the last meeting on December 20th, they’ve spent $265bn (a whopping 6% of annual GDP!) buying bonds.”
Japanese stocks rallied (NKY:IND) +2.5% while yields sank. The dollar (DXY) gained against the yen (FXY) -0.9%.
The 10-year Treasury yield fell 5 basis points to 3.49%. The 2-year yield (US2Y) was flat at 4.19%.
“We’d note that the 10yr Treasury yield is not exactly cheap here,” ING said. “It is practically at, or has been recently, some 150bp through the terminal funds rate being priced by the Fed funds future. That’s quite a spread.”
“History shows it has been wider, but not by much, and not for too long. History also shows that it is rare for it to trade through the funds rate by this much.”
The December PPI headlines a busy day for economic indicators. Economists expect a 0.1% decline for the month to an annual rate of 6.8%. The core PPI is forecast to edge up 0.1% with year-on-year dropping to 5.7%.
“US producer prices are expected to slow noticeably as profit margins start to come under pressure,” UBS’ Paul Donovan wrote.
At the same time premarket, December retail sales figures arrive. Economists expect a drop of 0.8%, with core retail sales sliding 0.4%.
“The rate of growth of core retail sales – we exclude the volatile gas, autos, and food components – has slowed materially since last spring,” Pantheon Macro’s Ian Shepherdson said. “Consumers have shifted some of their spending towards services as Covid fear has subsided, but more recently we think people have become more cautious in the face of increased economic uncertainty and sharply higher borrowing costs.”
Also on the calendar, December industrial production is out right before the start of trading with a 0.1% drop expected. Shortly after the opening bell November business inventories and the January NAHB housing market index are released.
Among active stocks, United Airlines rallied after a bullish profit forecast.
