Further strength in the U.S. dollar overnight is contributing to a rally in Treasuries across the curve this morning. The dollar was buoyed by weaker economic data in Asia and Europe, including softer inflation in Australia and a decline in a German business sentiment index. Regarding the latter, dampened confidence was mostly concentrated in the manufacturing sector (trade related), which aligns with the recent hard data trend. On a similar note, a measure of French factory confidence fell to a four-year low in April.
Recent manufacturing sentiment has likely been impacted by the looming decision by the White House on whether it will impose tariffs on auto imports. The European Central Bank (ECB) just released a report suggesting the impact of such tariffs would have only a limited impact on the Eurozone economy, due somewhat to the offsetting effect of retaliatory measures from the European Union. However, the report did acknowledge the risk of escalated trade tensions, defined as a 10% increase in U.S. tariffs on all trading partners. Such a move would reduce GDP by 1.5%, according to ECB estimates. Thus far, the markets are not pricing for this risk on the assumption that President Trump doesn’t want to do anything that might negatively impact stock markets and overall economic growth ahead of the 2020 election, particularly with a U.S./China agreement presumably imminent.
Jason Haley
Managing Director, Investment Management Group
| Date | Event | Surv(M) | Actual | Prior | Revised |
| 04/22/19 | Chicago Fed Nat Activity Index | -0.1 | -0.15 | -0.29 | -0.31 |
| 04/22/19 | Existing Home Sales | 5.30m | 5.21m | 5.51m | 5.48m |
| 04/22/19 | Existing Home Sales MoM | -3.80% | -4.90% | 11.80% | 11.20% |
| 04/23/19 | FHFA House Price Index MoM | 0.50% | 0.30% | 0.60% | — |
| 04/23/19 | Richmond Fed Manufact. Index | 10 | 3 | 10 | — |
| 04/23/19 | New Home Sales | 649k | 692k | 667k | 662k |
| 04/23/19 | New Home Sales MoM | -2.70% | 4.50% | 4.90% | 5.90% |
| 04/24/19 | MBA Mortgage Applications | — | -7.30% | -3.50% | — |
| 04/25/19 | Initial Jobless Claims | 200k | — | 192k | — |
| 04/25/19 | Continuing Claims | 1682k | — | 1653k | — |
| 04/25/19 | Durable Goods Orders | 0.80% | — | -1.60% | — |
| 04/25/19 | Durables Ex Transportation | 0.20% | — | -0.10% | — |
| 04/25/19 | Cap Goods Orders Nondef Ex Air | 0.20% | — | -0.10% | — |
| 04/25/19 | Cap Goods Ship Nondef Ex Air | 0.10% | — | -0.10% | — |
| 04/25/19 | Bloomberg Consumer Comfort | — | — | 60.3 | — |
| 04/25/19 | Kansas City Fed Manf. Activity | 9 | — | 10 | — |
| 04/26/19 | GDP Annualized QoQ | 2.20% | — | 2.20% | — |
| 04/26/19 | Personal Consumption | 1.00% | — | 2.50% | — |
| 04/26/19 | GDP Price Index | 1.20% | — | 1.70% | — |
| 04/26/19 | Core PCE QoQ | 1.30% | — | 1.80% | — |
| 04/26/19 | U. of Mich. Sentiment | 97 | — | 96.9 | — |
| 04/26/19 | U. of Mich. Current Conditions | — | — | 114.2 | — |
| 04/26/19 | U. of Mich. Expectations | — | — | 85.8 | — |
| 04/26/19 | U. of Mich. 1 Yr Inflation | — | — | 2.40% | — |
| 04/26/19 | U. of Mich. 5-10 Yr Inflation | — | — | 2.30% | — |
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