Treasury prices are drifting lower again this morning in a follow through to yesterday’s U.S./Mexico trade agreement. The U.S. dollar index is now down 2% from the mid-month high, and global equity markets are mostly higher. After falling more than 20% over the last two months, copper prices have rebounded nearly 7% over the last eight trading days. Such a sharp decline in a short timeframe is typically a sign of the market pricing a significant slowdown in global growth, but some analysts felt the move was overdone given current economic fundamentals and commodity valuations. The Treasury curve is modestly steeper this morning (2yr/10yr +1-2 bps), but the larger flattening trend is still in place. The 2yr/10yr spread tightened to a new cycle low of 18 bps yesterday, and on the front end of the curve, the 2yr/5yr spread fell to 8.5 bps (also a cycle low).

Jason Haley
Managing Director, Investment Management Group

Date TimeEventSurveyActualPriorRevised
08/27/2018Chicago Fed Nat Activity Index0.450.130.430.48
08/27/2018Dallas Fed Manf. Activity3030.932.3
08/28/2018Advance Goods Trade Balance-$69.0b-$72.2b-$68.3b-$67.9b
08/28/2018Wholesale Inventories MoM0.20%0.70%0.10%
08/28/2018Retail Inventories MoM0.40%0.00%
08/28/2018S&P CoreLogic CS 20-City MoM SA0.20%0.11%0.20%0.21%
08/28/2018S&P CoreLogic CS 20-City YoY NSA6.40%6.31%6.51%6.54%
08/28/2018S&P CoreLogic CS 20-City NSA Index213.07211.94212
08/28/2018S&P CoreLogic CS US HPI NSA Index204.48202.95202.91
08/28/2018S&P CoreLogic CS US HPI YoY NSA6.24%6.38%
08/28/2018Richmond Fed Manufact. Index1720
08/28/2018Conf. Board Consumer Confidence126.6127.4
08/28/2018Conf. Board Present Situation165.9
08/28/2018Conf. Board Expectations101.7
08/29/2018MBA Mortgage Applications4.20%
08/29/2018GDP Annualized QoQ4.00%4.10%
08/29/2018Personal Consumption3.90%4.00%
08/29/2018GDP Price Index3.00%3.00%
08/29/2018Core PCE QoQ2.00%2.00%
08/29/2018Pending Home Sales MoM0.30%0.90%
08/29/2018Pending Home Sales NSA YoY-2.50%-4.00%
08/30/2018PCE Core YoY2.00%1.90%
08/30/2018Personal Income0.40%0.40%
08/30/2018Personal Spending0.40%0.40%
08/30/2018Real Personal Spending0.20%0.30%
08/30/2018PCE Deflator MoM0.10%0.10%
08/30/2018PCE Deflator YoY2.30%2.20%
08/30/2018PCE Core MoM0.20%0.10%
08/30/2018Initial Jobless Claims213k210k
08/30/2018Continuing Claims1730k1727k
08/30/2018Bloomberg Consumer Comfort58.6
08/31/2018Chicago Purchasing Manager6365.5
08/31/2018U. of Mich. Sentiment95.595.3
08/31/2018U. of Mich. Current Conditions107.8
08/31/2018U. of Mich. Expectations87.3
08/31/2018U. of Mich. 1 Yr Inflation2.90%
08/31/2018U. of Mich. 5-10 Yr Inflation2.50%