There was better buying of long-end Treasuries overnight following last week’s sell-off that pushed the 10-year yield up 9 basis points (bps) to a 4-year high. The 2-year/10-year Treasury spread (curve slope) is still holding just below 60 bps. The government shutdown is in its third day, but it isn’t having a significant impact on markets at this point given that the debt ceiling is not in play this time around (no Treasury default risk). Major global equity indices are modestly higher for the most part today, and S&P 500 futures are unchanged. Investors are more focused on this week’s Bank of Japan (BOJ) and European Central Bank (ECB) meetings on Tuesday and Thursday, respectively. Any upgrades to either bank’s economic/inflation forecasts and/or hawkish guidance related to asset purchase programs would likely put further pressure on long-end government bond yields. San Francisco Fed President John Williams was the latest policymaker to suggest four rate hikes may be necessary in 2018. On the data front, this week will be headlined by the first look at Q4 GDP on Friday (3% expected).

Jason Haley
Managing Director, Investment Management Group

Date Event SurveyActual
01/22/2018Chicago Fed Nat Activity IndexDec0.220.27
01/23/2018Richmond Fed Manufact. IndexJan19
01/24/2018MBA Mortgage Applications19-Jan
01/24/2018FHFA House Price Index MoMNov0.50%
01/24/2018Markit US Manufacturing PMIJan P55
01/24/2018Markit US Services PMIJan P54.3
01/24/2018Markit US Composite PMIJan P
01/24/2018Existing Home SalesDec5.70m
01/24/2018Existing Home Sales MoMDec-1.90%
01/25/2018Advance Goods Trade BalanceDec-$68.9b
01/25/2018Wholesale Inventories MoMDec P0.40%
01/25/2018Retail Inventories MoMDec
01/25/2018Initial Jobless Claims20-Jan235k
01/25/2018Continuing Claims13-Jan1925k
01/25/2018Bloomberg Consumer Comfort21-Jan
01/25/2018New Home SalesDec675k
01/25/2018New Home Sales MoMDec-7.90%
01/25/2018Leading IndexDec0.50%
01/25/2018Kansas City Fed Manf. ActivityJan15
01/26/2018GDP Annualized QoQ4Q A3.00%
01/26/2018Personal Consumption4Q3.70%
01/26/2018GDP Price Index4Q A2.30%
01/26/2018Core PCE QoQ4Q A1.90%
01/26/2018Durable Goods OrdersDec P0.90%
01/26/2018Durables Ex TransportationDec P0.60%
01/26/2018Cap Goods Orders Nondef Ex AirDec P0.60%
01/26/2018Cap Goods Ship Nondef Ex AirDec P0.40%
01/29/2018Personal IncomeDec0.30%
01/29/2018Personal SpendingDec0.50%
01/29/2018Real Personal SpendingDec
01/29/2018PCE Deflator MoMDec0.10%
01/29/2018PCE Deflator YoYDec
01/29/2018PCE Core MoMDec0.20%
01/29/2018PCE Core YoYDec
01/29/2018Dallas Fed Manf. ActivityJan25.3