Confused by price action on the first day of the year!
January 3, 2023
–A boost to the dollar, bonds, stocks, gold to start the year. ECH3 (euro) at 1.0589 is below every price from the middle of December, GCG3 >1840 is above every price since July. SOFR contracts from March’25 back are up 8.5 to 10 bps.
–Fighting in Ukraine seems to be accelerating with Russians taking severe casualties in a missile attack in Makiivka near Donetsk. Perhaps some of the bid in treasuries has a flight-to-quality aspect, though equities are rebounding somewhat from end-of-year weakness as well.
–ISM Mfg and FOMC minutes tomorrow. Payrolls on Friday. Several Fed speakers Thursday and Friday, starting with Bostic.
