Treasury prices are modestly lower following a relatively quiet overnight session (Japan and China closed for holiday). The curve steepened to a 1-month high last Wednesday, but the 2-year/10-year spread has since fallen 6 basis points to 0.47%. With no major headlines over the weekend, S&P 500 futures are up 9 points currently, and credit spreads are a touch firmer. This week’s economic calendar is fairly active, including Wednesday’s FOMC meeting and Friday’s April jobs report. A rate hike is not expected this week, but the market will still pay close attention to the tone of the official statement with regards to growth and inflation expectations.

March personal income and spending were largely in line with expectations, and inflation-adjusted spending bounced back with a 0.4% increase (0.5% expected) following a 0.2% decline in February. Both headline and core PCE matched expectations in March on a month-over-month basis (+0.0% and +0.2%, respectively), and as expected, core PCE bounced 30 bps higher to 1.9% year-over-year. The year-over-year increase was largely attributable to the base effect. If you recall, the monthly core measure went negative in March 2017, which is a rare event and created a lower base comparison for the current year-over-year metric.

Jason Haley
Managing Director, Investment Management Group

Date TimeEventSurveyActualPriorRevised
04/30/2018Personal Income0.40%0.30%0.40%0.30%
04/30/2018Personal Spending0.40%0.40%0.20%0.00%
04/30/2018Real Personal Spending0.50%0.40%0.00%-0.20%
04/30/2018PCE Deflator MoM0.00%0.00%0.20%
04/30/2018PCE Deflator YoY2.00%2.00%1.80%1.70%
04/30/2018PCE Core MoM0.20%0.20%0.20%
04/30/2018PCE Core YoY1.90%1.90%1.60%
04/30/2018Chicago Purchasing Manager5857.4
04/30/2018Pending Home Sales MoM0.70%3.10%
04/30/2018Pending Home Sales NSA YoY-4.40%
04/30/2018Dallas Fed Manf. Activity2321.4
05/01/2018Markit US Manufacturing PMI56.556.5
05/01/2018Construction Spending MoM0.50%0.10%
05/01/2018ISM Manufacturing58.459.3
05/01/2018ISM Employment57.3
05/01/2018ISM Prices Paid78.578.1
05/01/2018ISM New Orders61.9
05/01/2018Wards Domestic Vehicle Sales13.40m13.42m
05/01/2018Wards Total Vehicle Sales17.10m17.40m
05/02/2018MBA Mortgage Applications-0.20%
05/02/2018ADP Employment Change198k241k
05/02/2018FOMC Rate Decision (Upper Bound)1.75%1.75%
05/02/2018FOMC Rate Decision (Lower Bound)1.50%1.50%
05/03/2018Challenger Job Cuts YoY39.40%
05/03/2018Nonfarm Productivity0.90%0.00%
05/03/2018Unit Labor Costs3.00%2.50%
05/03/2018Initial Jobless Claims224k209k
05/03/2018Continuing Claims1835k1837k
05/03/2018Trade Balance-$50.0b-$57.6b
05/03/2018Bloomberg Consumer Comfort57.5
05/03/2018Markit US Services PMI54.454.4
05/03/2018Markit US Composite PMI54.8
05/03/2018ISM Non-Manf. Composite5858.8
05/03/2018Durable Goods Orders2.60%
05/03/2018Durables Ex Transportation0.00%
05/03/2018Cap Goods Orders Nondef Ex Air-0.10%
05/03/2018Cap Goods Ship Nondef Ex Air-0.70%
05/03/2018Factory Orders1.40%1.20%
05/03/2018Factory Orders Ex Trans0.10%
05/04/2018Change in Nonfarm Payrolls191k103k
05/04/2018Two-Month Payroll Net Revision-50k
05/04/2018Change in Private Payrolls190k102k
05/04/2018Change in Manufact. Payrolls20k22k
05/04/2018Unemployment Rate4.00%4.10%
05/04/2018Underemployment Rate8.00%
05/04/2018Average Hourly Earnings MoM0.20%0.30%
05/04/2018Average Hourly Earnings YoY2.70%2.70%
05/04/2018Average Weekly Hours All Employees34.534.5
05/04/2018Labor Force Participation Rate62.90%62.90%
05/07/2018Consumer Credit$16.000b$10.601b
05/07/2018Mortgage Delinquencies5.17%
05/07/2018MBA Mortgage Foreclosures1.19%