The long-end of the US Treasury curve rallied overnight on weakness in Japanese and European equities (NI225 -2.39%, FTSE -.45%). Data out of Europe was strong with PPI and Markit PMI coming in above expectations. In addition, the EU’s top court ruled that the UK should be allowed to reverse the Article 50 notice which triggered the Brexit process. Contracts on the S&P 500 are surrendering yesterday’s gains (SPX -.27%) as markets continue to push for details on what, if anything, was agreed to between the US and China. Following Fed Chair Powell’s speech last week and the weakening global economic data, Treasury yields have declined dramatically led by the long end of the curve, resulting in the 2-5yr spread inverting.

Please note that SIFMA is recommending a bond market close on Wednesday in remembrance of former US President George H.W. Bush.

Chris Eckhoff
Associate, Investment Management Group


12/03Markit US Manufacturing PMI55.455.4
12/03Construction Spending MoM0.40%0.00%
12/03ISM Manufacturing57.557.7
12/03ISM Employment56.8
12/03ISM Prices Paid7071.6
12/03ISM New Orders57.4
12/03Wards Total Vehicle Sales17.20m17.50m
12/05MBA Mortgage Applications5.50%
12/05ADP Employment Change195k227k
12/05Nonfarm Productivity2.30%2.20%
12/05Unit Labor Costs1.00%1.20%
12/05Markit US Services PMI54.454.4
12/05Markit US Composite PMI54.4
12/05ISM Non-Manufacturing Index5960.3
12/05U.S. Federal Reserve Releases Beige Book
12/06Challenger Job Cuts YoY153.60%
12/06Trade Balance-$55.0b-$54.0b
12/06Initial Jobless Claims225k234k
12/06Continuing Claims1695k1710k
12/06Bloomberg Consumer Comfort60.6
12/06Factory Orders-2.00%0.70%
12/06Factory Orders Ex Trans0.40%
12/06Durable Goods Orders-2.40%-4.40%
12/06Durables Ex Transportation0.10%0.10%
12/06Cap Goods Orders Nondef Ex Air0.00%
12/06Cap Goods Ship Nondef Ex Air0.30%
12/06Household Change in Net Worth$2191b
12/07Change in Nonfarm Payrolls198k250k
12/07Two-Month Payroll Net Revision0k
12/07Change in Private Payrolls200k246k
12/07Change in Manufact. Payrolls18k32k
12/07Unemployment Rate3.70%3.70%
12/07Underemployment Rate7.40%
12/07Average Hourly Earnings MoM0.30%0.20%
12/07Average Hourly Earnings YoY3.10%3.10%
12/07Average Weekly Hours All Employees34.534.5
12/07Labor Force Participation Rate62.90%62.90%
12/07Wholesale Inventories MoM0.70%0.70%
12/07Wholesale Trade Sales MoM0.20%
12/07U. of Mich. Sentiment9797.5
12/07U. of Mich. Current Conditions112.3
12/07U. of Mich. Expectations88.1
12/07U. of Mich. 1 Yr Inflation2.80%
12/07U. of Mich. 5-10 Yr Inflation2.60%
12/07Consumer Credit$15.000b$10.923b