QUICK QUILL — Germany’s IFO says take the under on Thursday’s Philly Fed survey, while below-normal New York service data point to greater labor risks and deepening disinflation. As trading gets thinner with the holidays approaching, these regional fundamentals continue to support a buy-the-dip strategy in Treasuries.
TAKEAWAYS
- German IFO Mfg Business Expectations fell from 85.2 last month to 84.3 in December, below all 23 Bloomberg estimates; despite IFO expectations having led turning points in the Philly Fed Mfg current conditions, the consensus expects an improvement from -5.0 to -3.9 in December
- In the NY Fed’s Services survey, Current Business Activity and Future Capex printed at below-trend z-scores of -1.05 and -0.77 in December, respectively; Future Capex has been negative for eight of the last ten months, with the current level on par with the aftermath of the GFC
- Continuing claims in New York, the most services-intensive state, have been in double digits YoY for nine months, a streak with precedent only in the GFC; with NY Fed Services Employment contracting in December for the first time since the pandemic, risk for additional job loss remain