An unexpected increase in weekly jobless claims is fueling a bid for Treasuries this morning despite yields initially being higher overnight on increased hopes of a stimulus deal before the week is over. Initial jobless claims rose to 885,000 last week, the highest level in three months and 67,000 more than expected. Housing data continues to surpass expectations, and the November housing starts report was no exception. Starts were up 1.2% on the month (0.3% expected), and building permits, which are a more forward-looking metric, rose 6.2% versus expectations of a 1% gain.
There were no real surprises from the Fed yesterday. The only change in the official statement was an enhancement to the guidance for the pace of asset purchases, adding that the purchases will continue “until substantial further progress has been made toward the Committee’s maximum employment and price stability goals.” The Fed had telegraphed this move in the minutes of the November 5 FOMC meeting, and they chose not to use any of the remaining dry powder at this meeting, including extending the duration of purchases. In the updated SEP, the median fed funds projection was unchanged (no increase through 2023), although the number of participants forecasting a rate increase in 2023 rose to five (four at September meeting).
Jason Haley
Chief Investment Officer
Date | Event | Surv(M) | Actual | Prior | Revised |
12/15/20 | Empire Manufacturing | 6.3 | 4.9 | 6.3 | — |
12/15/20 | Import Price Index MoM | 0.30% | 0.10% | -0.10% | — |
12/15/20 | Import Price Index ex Petroleum MoM | 0.20% | 0.00% | 0.00% | -0.10% |
12/15/20 | Import Price Index YoY | -0.90% | -1.00% | -1.00% | — |
12/15/20 | Export Price Index MoM | 0.20% | 0.60% | 0.20% | — |
12/15/20 | Export Price Index YoY | — | -1.10% | -1.60% | — |
12/15/20 | Industrial Production MoM | 0.30% | 0.40% | 1.10% | 0.90% |
12/15/20 | Capacity Utilization | 73.00% | 73.30% | 72.80% | 73.00% |
12/15/20 | Manufacturing (SIC) Production | 0.40% | 0.80% | 1.00% | 1.10% |
12/15/20 | Net Long-term TIC Flows | — | $51.9b | $108.9b | — |
12/15/20 | Total Net TIC Flows | — | -$10.4b | -$79.9b | -$80.5b |
12/16/20 | MBA Mortgage Applications | — | 1.10% | -1.20% | — |
12/16/20 | Retail Sales Advance MoM | -0.30% | -1.10% | 0.30% | -0.10% |
12/16/20 | Retail Sales Ex Auto MoM | 0.10% | -0.90% | 0.20% | -0.10% |
12/16/20 | Retail Sales Ex Auto and Gas | 0.10% | -0.80% | 0.20% | -0.10% |
12/16/20 | Retail Sales Control Group | 0.20% | -0.50% | 0.10% | -0.10% |
12/16/20 | Markit US Manufacturing PMI | 55.8 | 56.5 | 56.7 | — |
12/16/20 | Markit US Services PMI | 55.9 | 55.3 | 58.4 | — |
12/16/20 | Markit US Composite PMI | — | 55.7 | 58.6 | — |
12/16/20 | Business Inventories | 0.60% | 0.70% | 0.70% | 0.80% |
12/16/20 | NAHB Housing Market Index | 88 | 86 | 90 | — |
12/16/20 | FOMC Rate Decision (Upper Bound) | 0.25% | 0.25% | 0.25% | — |
12/16/20 | FOMC Rate Decision (Lower Bound) | 0.00% | 0.00% | 0.00% | — |
12/16/20 | Interest Rate on Excess Reserves | 0.10% | 0.10% | 0.10% | — |
12/17/20 | Initial Jobless Claims | 818k | 885k | 853k | 862k |
12/17/20 | Continuing Claims | 5700k | 5508k | 5757k | 5781k |
12/17/20 | Housing Starts | 1535k | 1547k | 1530k | 1528k |
12/17/20 | Housing Starts MoM | 0.30% | 1.20% | 4.90% | 6.30% |
12/17/20 | Building Permits | 1560k | 1639k | 1545k | 1544k |
12/17/20 | Building Permits MoM | 1.00% | 6.20% | 0.00% | -0.10% |
12/17/20 | Philadelphia Fed Business Outlook | 20 | 11.1 | 26.3 | — |
12/17/20 | Bloomberg Economic Expectations | — | — | 43 | — |
12/17/20 | Bloomberg Consumer Comfort | — | — | 49 | — |
12/17/20 | Kansas City Fed Manf. Activity | 9 | 14 | 11 | — |
12/18/20 | Current Account Balance | -$187.0b | — | -$170.5b | — |
12/18/20 | Leading Index | 0.50% | — | 0.70% | — |
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