Treasuries opened this morning essentially unchanged from yesterday’s close, while in the overnight session, the 10-year touched 2.64 for the first time since 2014. Despite the drama in Washington, equity markets chose to ignore the uncertainty coming from the capital and rallied instead. The House was able to pass a short-term funding bill late last night, but its prospects  in the Senate look dire as Democrats want to link DACA with the funding extension, while a couple of Republicans who oppose an increase in government spending have come out as no votes. Federal funding is set to expire tonight at midnight and the government will shut down non-essential operations for the first time since 2013.

Hafizan Hamzah
Director, Investment Management Group

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. Current Conditions114.4113.8
01/19U. of Mich. Expectations85.384.3
01/19U. of Mich. 1 Yr Inflation2.70%
01/19U. of Mich. 5-10 Yr Inflation2.40%