April 24, 2019 Headlines

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

04/22/19Chicago Fed Nat Activity Index-0.1-0.15-0.29-0.31
04/22/19Existing Home Sales5.30m5.21m5.51m5.48m
04/22/19Existing Home Sales MoM-3.80%-4.90%11.80%11.20%
04/23/19FHFA House Price Index MoM0.50%0.30%0.60%
04/23/19Richmond Fed Manufact. Index10310
04/23/19New Home Sales649k692k667k662k
04/23/19New Home Sales MoM-2.70%4.50%4.90%5.90%
04/24/19MBA Mortgage Applications-7.30%-3.50%
04/25/19Initial Jobless Claims200k192k
04/25/19Continuing Claims1682k1653k
04/25/19Durable Goods Orders0.80%-1.60%
04/25/19Durables Ex Transportation0.20%-0.10%
04/25/19Cap Goods Orders Nondef Ex Air0.20%-0.10%
04/25/19Cap Goods Ship Nondef Ex Air0.10%-0.10%
04/25/19Bloomberg Consumer Comfort60.3
04/25/19Kansas City Fed Manf. Activity910
04/26/19GDP Annualized QoQ2.20%2.20%
04/26/19Personal Consumption1.00%2.50%
04/26/19GDP Price Index1.20%1.70%
04/26/19Core PCE QoQ1.30%1.80%
04/26/19U. of Mich. Sentiment9796.9
04/26/19U. of Mich. Current Conditions114.2
04/26/19U. of Mich. Expectations85.8
04/26/19U. of Mich. 1 Yr Inflation2.40%
04/26/19U. of Mich. 5-10 Yr Inflation2.30%

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