Personal Income and Spending Beat, but Risk Driving Price Action

Talking Points:

-US Personal Income (Jan) comes in at 0.3% vs. 0.2% est. and 0.0% prior

-US Personal Spending (Jan) comes in at 0.4% vs. 0.1% est. and 0.1% revised prior

-Little change in FX as markets await US equity market open and ISM Manufacturing Data at 15:00GMT

Personal Income and Spending data out of the U.S. kicked off the session and added to chop in the foreign exchange market as we approach the open of equity markets and key ISM Manufacturing, ISM Prices Paid and US Construction Spending data at 15:00GMT. PCE Core and Deflator data also released at 13:30GMT came in in line with expectations, although the Deflator YoY figure beat by a tenth of a percent.

Although in normal market conditions these better than expected figures would be viewed favorably- especially in the context of weak U.S. data as of late- continued market uncertainty surrounding the Ukraine and state of global markets remains the key driver of price action. At the current juncture we are seeing U.S. futures, yields and USD/JPY trading lower ahead of the equity market open. 10yr yields as of 8:50AM EST are standing at 2.6065% (lows not seen since early February) and commodities are higher across the board. Wheat and corn on the CBOT are seeing moves higher on the day in excess of 2 and 4 percent respectively as the Ukraine serves as a large exporter of the crops.

Note that we have major event risk on tap this week including four central bank meetings and U.S. Non-farm Payrolls.