December 17, 2019 Headlines

Treasury prices are drifting higher this morning amid a modest risk-off tone. Brexit is back in the headlines following Boris Johnson’s big election win. The UK prime minister is ruling out an extension to the Brexit transition deadline of December 31, regardless of whether a deal has been reached with European Union officials. In other words, a hard Brexit is back on the table. In fixed income, the 2-year/10-year spread is currently near a 3-month high of 25 bps, and implied interest rate volatility has settled back down to pre-August levels. The latter has been positive for mortgages, with Agency MBS option-adjusted spreads 3-5 bps tighter versus Treasuries on the month.

Jason Haley
Chief Investment Officer

12/16/2019Empire Manufacturing43.52.9
12/16/2019Markit US Manufacturing PMI52.652.552.6
12/16/2019Markit US Services PMI5252.251.6
12/16/2019Markit US Composite PMI52.252
12/16/2019NAHB Housing Market Index70767071
12/16/2019Net Long-term TIC Flows$32.5b$49.5b
12/16/2019Total Net TIC Flows-$48.3b-$37.6b-$38.1b
12/17/2019Housing Starts1345k1365k1314k1323k
12/17/2019Building Permits1410k1482k1461k
12/17/2019Housing Starts MoM2.40%3.20%3.80%4.50%
12/17/2019Building Permits MoM-3.50%1.40%5.00%
12/17/2019Industrial Production MoM0.90%1.10%-0.80%-0.90%
12/17/2019Manufacturing (SIC) Production0.80%1.10%-0.60%-0.70%
12/17/2019Capacity Utilization77.40%77.30%76.70%76.60%
12/17/2019JOLTS Job Openings70097024
12/18/2019MBA Mortgage Applications3.80%
12/19/2019Current Account Balance-$122.0b-$128.2b
12/19/2019Philadelphia Fed Business Outlook810.4
12/19/2019Initial Jobless Claims225k252k
12/19/2019Continuing Claims1676k1667k
12/19/2019Bloomberg Consumer Comfort62.1
12/19/2019Bloomberg Economic Expectations51.5
12/19/2019Leading Index0.10%-0.10%
12/19/2019Existing Home Sales5.44m5.46m
12/19/2019Existing Home Sales MoM-0.40%1.90%
12/20/2019GDP Annualized QoQ2.10%2.10%
12/20/2019Personal Consumption2.90%2.90%
12/20/2019GDP Price Index1.80%1.80%
12/20/2019Core PCE QoQ2.10%2.10%
12/20/2019Personal Income0.30%0.00%
12/20/2019Personal Spending0.40%0.30%
12/20/2019Real Personal Spending0.20%0.10%
12/20/2019PCE Deflator MoM0.20%0.20%
12/20/2019PCE Deflator YoY1.40%1.30%
12/20/2019PCE Core Deflator MoM0.10%0.10%
12/20/2019PCE Core Deflator YoY1.50%1.60%
12/20/2019U. of Mich. Sentiment99.299.2
12/20/2019U. of Mich. Current Conditions115.2
12/20/2019U. of Mich. Expectations88.9
12/20/2019U. of Mich. 1 Yr Inflation2.40%
12/20/2019U. of Mich. 5-10 Yr Inflation2.30%
12/20/2019Kansas City Fed Manf. Activity-3-3




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