Treasuries sold off last night following increased Eurobond supply as well as the fear that Apple would have to sell Treasuries in order to fund its $38 billion repatriation tax bill. Additionally, TIC data for November showed that China had reduced its holdings to the lowest level since July and that Japan had hit a 4-year low. Given that this data was from November, it is unlikely this reduction had anything to do with recent trade tensions, but given the flattening experienced from then onward, it is possible that China and Japan are continuing to reduce their holdings.

Housing starts came in below expectations but are in line with pre-hurricane levels and the decline in the rate is possibly due to normalization after the surge seen in October and November.

Hafizan Hamzah
Director, Investment Management Group

DateEventSurv(M)ActualPriorRevised
01/16Empire Manufacturing1917.71819.6
01/16Revisions: NY Federal Reserve Empire Manufacturing
01/17MBA Mortgage Applications4.10%8.30%
01/17Industrial Production MoM0.50%0.90%0.20%-0.10%
01/17Capacity Utilization77.40%77.90%77.10%77.20%
01/17Manufacturing (SIC) Production0.30%0.10%0.20%0.30%
01/17NAHB Housing Market Index727274
01/17U.S. Federal Reserve Releases Beige Book
01/17Total Net TIC Flows$33.8b$151.2b$152.9b
01/17Net Long-term TIC Flows$57.5b$23.2b$26.2b
01/18Housing Starts1275k1192k1297k1299k
01/18Housing Starts MoM-1.70%-8.20%3.30%3.00%
01/18Building Permits1295k1302k1298k1303k
01/18Building Permits MoM-0.60%-0.10%-1.40%-1.00%
01/18Philadelphia Fed Business Outlook2522.226.227.9
01/18Initial Jobless Claims249k220k261k
01/18Continuing Claims1900k1952k1867k1876k
01/18Bloomberg Economic Expectations52.547
01/18Bloomberg Consumer Comfort53.853.5
01/19U. of Mich. Sentiment9795.9
01/19U. of Mich. Expectations85.384.3
01/19U. of Mich. 1 Yr Inflation2.70%
01/19U. of Mich. 5-10 Yr Inflation2.40%
01/19U. of Mich. Current Conditions114.4113.8