Trading desks are typically thinly staffed the week between Christmas and New Year’s Day, and with the blizzard that hit the northeast this weekend, the staffing is even lighter. This will make trading that much more volatile with a short trading week and little economic data.
The news focus today was the People’s Bank of China hiking the one-year lending rate on Saturday by 25 bps to 5.81%. They also raised the one-year deposit rate by 25 bps to 2.75%. Chinese officials are trying to curb growth and inflation, especially considering their inflation measured 5.1% in November. In the U.S. an inflation number that high would send interest rates soaring.
Finally, the U.S. Treasury will auction $35 billion of 2 year notes today, $35 billion of 5 year notes Tuesday and $29 billion of 7 year notes on Wednesday.
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