S&P MMS expects initial claims to rise 6,000 to the 390,000 level in the week ended Dec. 22. A number in line with this estimate would pull the four-week moving average 26,000 lower to the 412,000 level, the lowest level since the middle of September. This is likely to set the tone early, weighing on Treasuries and adding fuel to the recent equity rally, but traders will also be watching for the results of the Treasury's 2-year note auction.
In economic data Wednesday, an update on retail sales showed continued weakness. The Redbook Retail Sales Average dropped 4.5% in the three weeks ended Dec. 22 compared to the same period last month.