What's going on

The bottom line with all the Fed speak this week along with the FOMC minutes is that their rhetoric matches up with no expected rate cut this month. In fact, you have to go out to the June fed funds contract to fully price in another rate reduction.

If this continues, we'll see if it impacts what the Powell says at the January presser. 'This' being the notable rise in some commodities of late.

I'm guessing the 3.5% rise in copper prices over the past 3 trading days which followed a 3.3% rise in the previous 3 days to that, bringing the 5 day gain to 7% is in part due to the expected rebuilds in the devastated parts of LA. Lumber prices are up 7.4% this week too. Natural gas by the way because of the cold weather is again approaching $4 per bcf. Oil is getting dragged up too, now above $76, the highest since July. We remain bullish and long oil and gas stocks.

Copper

Lumber

Natural Gas

Bond yields are certainly the big market story this week and we're ending it with further gains. The 10 yr JGB yield rose another 2 bps to 1.20%, up 10 bps on the week. In case you didn't see yesterday, base pay in Japan rose 2.7% y/o/y in November vs 2.5% in October and that is the quickest pace since November 1992. The Australian 10 yr yield jumped 16 bps this week to 4.55%. The UK saw it the worst with the 10 yr gilt yield higher by 25 bps to 4.84%, up each day this week. France has budget challenges too and the 10 yr oat yield rose by 12 bps to 3.41%. German yields rose 16 bps and in the US, the 10 yr yield is now up 10 bps to 4.70% on the week.