US Treasuries rallied overnight as the Asian markets continued the risk-off sentiment (SSE -.82%, TOPIX -1.99%) on reports that China will not offer new commitments to stimulate its economy. The decline in Europe was more subdued (STOXX -.2%) and S&P futures are set to open +.57%. Yesterday’s Empire State manufacturing survey missed expectations as new orders and shipments declined. On the other hand, the employment index reached all time highs supporting the narrative of a strong US consumer but may send a notice regarding the business cycle given capacity constraints. In the morning, the market will receive data on housing starts and building permits before looking forward to the Federal Reserve decision on Wednesday.  

Chris Eckhoff
Associate, Investment Management Group

DateEventSurv(M)ActualPriorRevised
12/17Empire Manufacturing2010.923.3
12/17NAHB Housing Market Index605660
12/17Total Net TIC Flows$42.0b-$29.1b-$29.2b
12/17Net Long-term TIC Flows$31.3b$30.8b
12/18Housing Starts1226k1256k1228k1217k
12/18Housing Starts MoM-0.20%3.20%1.50%-1.60%
12/18Building Permits1260k1328k1263k1265k
12/18Building Permits MoM-0.40%5.00%-0.60%-0.40%
12/19MBA Mortgage Applications1.60%
12/19Current Account Balance-$125.0b-$101.5b
12/19Existing Home Sales5.20m5.22m
12/19Existing Home Sales MoM-0.40%1.40%
12/19FOMC Rate Decision (Upper Bound)2.50%2.25%
12/19FOMC Rate Decision (Lower Bound)2.25%2.00%
12/19Interest Rate on Excess Reserves2.40%2.20%
12/20Philadelphia Fed Business Outlook1512.9
12/20Initial Jobless Claims215k206k
12/20Continuing Claims1663k1661k
12/20Bloomberg Consumer Comfort59.4
12/20Bloomberg Economic Expectations56
12/20Leading Index0.00%0.10%
12/21GDP Annualized QoQ3.50%3.50%
12/21Personal Consumption3.60%3.60%
12/21GDP Price Index1.70%1.70%
12/21Core PCE QoQ1.50%1.50%
12/21Durable Goods Orders1.60%-4.30%
12/21Durables Ex Transportation0.30%0.20%
12/21Cap Goods Orders Nondef Ex Air0.20%0.00%
12/21Cap Goods Ship Nondef Ex Air0.20%0.30%
12/21Personal Income0.30%0.50%
12/21Personal Spending0.30%0.60%
12/21Real Personal Spending0.30%0.40%
12/21PCE Deflator MoM0.00%0.20%
12/21PCE Deflator YoY1.80%2.00%
12/21PCE Core MoM0.20%0.10%
12/21PCE Core YoY1.90%1.80%
12/21U. of Mich. Sentiment97.597.5
12/21U. of Mich. Current Conditions115.2
12/21U. of Mich. Expectations86.1
12/21U. of Mich. 1 Yr Inflation2.70%
12/21U. of Mich. 5-10 Yr Inflation2.40%
12/21Kansas City Fed Manf. Activity1315