INSUBCONTINENT EXCLUSIVE:
By Emily BarrettInvestors face a crush of events next week that could sweep away the biggest hurdles to a full-blown race into riskier
assets, if things line up just right.
Over the second half of the week, possible catalysts for a Treasury market sell-off will arrive in
close succession: Policy decisions from the United States and euro-zone central banks are expected to offer no fresh hints of easing in the
election could finally pave a more resolute course for an exit from the European Union.
Treasuries were already on the ropes Friday, thanks
That pushed the S-P 500 to the brink of a record high, drove market pricing for a full Federal Reserve rate cut to the end of 2020, and
thrust the 10-year yield toward the upper end of its recent range, at around 1.84 per cent.
The events ahead will determine the
macroeconomic backdrop heading into the new year, but the question for investors is how much of the real action next week is already baked
For Kathy Jones at Charles Schwab - Co., the more pressing issue remains United States -China trade talks
The big catalyst for risk appetite and significantly higher yields in one of the last actively traded weeks of the year would be a credible
United States 10-year yields down about 80 basis points in 2019, driving Treasuries to a 7.3 per cent return this year through Dec
11, the same day as the Fed decision, shows an annual increase faster than the expected 2 per cent
for interest rates -- which will be updated Wednesday -- since September
expect rates to remain on hold or move higher in 2020.
Whichever way traders see the risks tilting through year-end, the coming week could
be one of the last good opportunities of the decade to jump into the fray, before clearing out for the holidays.
What to WatchMuch of the
But markets will also be looking for signs of movement in trade talks ahead of the Dec
11: FOMC rate decision and Powell press conferenceDec
10: NFIB small business optimism; nonfarm productivity; unit labor costsDec
11: MBA mortgage applications; consumer price index; real average earnings; monthly budget statementDec
12: Producer price index; jobless claims; Bloomberg consumer comfort; household change in net worthDec
13: Import/export prices; retail sales; Bloomberg United States economic survey; business inventoriesAnd the auction schedule:Dec
9: $42 billion of 13-week bills; $36 billion of 26-week bills; $38 billion 3-year notesDec
10: $24 billion of 10-year notesDec
12: 4-, 8-week bills; 30-year bond re-opening
