The Asian economic calendar started out with the Bank of Japan’s quarterly Tankan manufacturing survey which came in slightly below forecasts while December Chinese new loans posted an increase from November’s reading and that sets the stage for a record amount of new Chinese loans for the year. Also out overnight was October Japanese industrial production that managed a slight gain of +0.1% and a decline in UK ILO unemployment was seen and that would seem to leave international economic conditions in the favor of Treasury bears. However, March Bonds are showing positive initial action today with another higher high for the move. We think the bounce this week has primarily been the result of short covering ahead of today’s potential volatility event and we also think that some shorts have decided to bank profits because they are taking the Fed at its word that they will be 1 and done. However, we can’t help but think animal spirits, better recent unemployment data, a quasi-bubble in equity prices and less international headwinds might register with the Fed and that could result in some modest hawkish hints within the statement and or press conference. The North American session will start out with November retail sales which are forecast to rise by +0.3% but that is a softer reading than was posted last month. US November producer price index is expected to see a minimal increase of +0.1%. However, November industrial production is forecast to see a slight decline of 0.2% from October’s unchanged reading. The markets will also be presented with new US auto sales readings.