April 26, 2019 Headlines

The Treasury curve is lower and steeper this morning following the release of Q1 GDP, which showed a lower than expected increase in inflation. The front end of the curve is down 5 basis points while the long end is down 3 basis points and the spread between the 2-year and 10-year part of the curve is sitting at 22 basis points (+8 basis points MTD).

The main focus of the market this morning has been the strong Q1 GDP print, 3.2% vs 2.3% expected. This expansion was driven primarily by upticks in inventory and trade, two more volatile components of GDP, up 0.65% and 1.03% respectively. However, the first quarter showed weakness in demand as consumer spending (70% of US GDP) increased only slightly while business investment slowed over the first three months of 2019. Without increases in consumer spending it will be difficult for the economy to maintain this level of expansion. The GDP release also showed relatively tame inflation, with the price index increasing by 0.9%, 0.3% lower than expectations.

Hafizan Hamzah
Director, Investment Management Group

DateEventSurv(M)ActualPriorRevised
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 Claims200k230k192k193k
04/25/19Continuing Claims1682k1655k1653k1654k
04/25/19Durable Goods Orders0.80%2.70%-1.60%-1.10%
04/25/19Durables Ex Transportation0.20%0.40%-0.10%-0.20%
04/25/19Cap Goods Orders Nondef Ex Air0.20%1.30%-0.10%0.10%
04/25/19Cap Goods Ship Nondef Ex Air0.10%-0.20%-0.10%0.20%
04/25/19Bloomberg Consumer Comfort60.860.3
04/25/19Kansas City Fed Manf. Activity8510
04/26/19GDP Annualized QoQ2.30%3.20%2.20%
04/26/19Personal Consumption1.00%1.20%2.50%
04/26/19GDP Price Index1.20%0.90%1.70%
04/26/19Core PCE QoQ1.40%1.30%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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