Bonds began the day roughly unchanged and then followed European bonds into weaker territory after the European Central Bank (ECB) upped its inflation forecasts and announced an impending draw-down of its bond holdings.  15 minutes later, US domestic data came out almost entirely weaker than expected.  This sent US bonds back into positive territory before the first hour of domestic trading was in the books.  The rest of the day will be spent watching the lower range boundary in 10s and resolving whatever the European influence proves to be after ECB President Lagarde's press conference.

To get a sense of the relative impact on EU bonds vs US bonds, check out the following chart.  As always "Germany" = "Europe" when it comes to choosing one overarching sovereign benchmark for the EU.  Today's ECB news was clearly this week's big to-do for Europe whereas CPI still reigns supreme.

20221215 open.png

For those who missed it yesterday (it wasn't added to the recap until after the fact), here is the marked-up dot plot from the Fed, comparing the previous dots to yesterday's:

marked up dots 20221214.png