Treasuries are flat to start the week following a relatively quiet weekend from a news perspective. Global equities are mixed but little changed in either direction, and S&P 500 futures are currently down 1 point. A Reuters article suggests that the Bank of Japan is in the midst of a hawkish shift in monetary policy. Last week the central bank altered its asset purchase policy to allow more fluctuation in government bond yields away from its target levels, but at the same time, the target levels were left unchanged (0% for 10-year yields). According to the article, last week’s decision was a compromise between a growing number of hawks within the BOJ and its more dovish leader (Kuroda). However, a source close to the situation said, “ The latest steps marked a major turning point for Kuroda’s stimulus program. The reflationists have become a minority, which means the BOJ is turning more hawkish.” If this comes to fruition in the coming months, there may be upward pressure on long-end yields in Europe and the United States, particularly as it relates to term premiums (all else equal). This week’s economic calendar is relatively light and will be headlined by the July CPI report on Friday.

Jason Haley
Managing Director, Investment Management Group

Date TimeEventSurveyActualPriorRevised
08/07/2018JOLTS Job Openings66256638
08/07/2018Consumer Credit$15.000b$24.559b
08/08/2018MBA Mortgage Applications-2.60%
08/09/2018Initial Jobless Claims220k218k
08/09/2018Continuing Claims1735k1724k
08/09/2018PPI Final Demand MoM0.20%0.30%
08/09/2018PPI Ex Food and Energy MoM0.30%0.30%
08/09/2018PPI Ex Food, Energy, Trade MoM0.20%0.30%
08/09/2018PPI Final Demand YoY3.40%3.40%
08/09/2018PPI Ex Food and Energy YoY2.80%2.80%
08/09/2018PPI Ex Food, Energy, Trade YoY2.70%
08/09/2018Bloomberg Aug. United States Economic Survey
08/09/2018Bloomberg Consumer Comfort58.6
08/09/2018Wholesale Inventories MoM0.00%0.00%
08/09/2018Wholesale Trade Sales MoM2.50%
08/10/2018CPI MoM0.20%0.10%
08/10/2018CPI Ex Food and Energy MoM0.20%0.20%
08/10/2018CPI YoY2.90%2.90%
08/10/2018CPI Ex Food and Energy YoY2.30%2.30%
08/10/2018CPI Index NSA251.973251.989
08/10/2018CPI Core Index SA257.305
08/10/2018Real Avg Weekly Earnings YoY0.20%0.50%
08/10/2018Real Avg Hourly Earning YoY0.00%
08/10/2018Monthly Budget Statement-$81.0b-$74.9b