January 2, 2019:

 

Good morning and welcome to 2019. As we kick-start 2019, rates are down 1-2 basis points and equities are pointing towards a lower opening after a poor session in Asia and Europe. Much of the movement this morning is driven by economic weakness in China, with a key manufacturing gauge showing a slump in Chinese factory production amidst the ongoing trade dispute with the US. While there is positive momentum on the trade front (negotiations occurring next week), this is another sign that the trade war is impacting global economic production. 

 

Here in the US, there is optimism that the government shutdown may be nearing an end, as President Trump suggests he open to a deal. He has invited the top congressional leaders from both parties to the White House for a briefing on border security today in a possible opening for negotiations, and will include a briefing by Homeland Security officials. Democratic leaders have not stated publicly whether they will accept the invitation.

 

Looking forward into the week, we have the monthly employment report for December due on Friday, and Fed Chair Jerome Powell is being interviewed with his predecessors Janet Yellen and Ben Bernanke on Friday.  Have a great day!

 

FirstBank Capital Markets Group