Dollar weakness remains the focus in global markets today, and Treasury prices are drifting lower again. ECB President Mario Draghi stopped short of talking down the recent strength in the euro during his post-meeting press conference this morning, and as a result, the euro has rallied another 1% to a 1.25 exchange rate. The official ECB statement was largely as expected, keeping rates unchanged and maintaining the current pace of quantitative easing. Additionally, Treasury Secretary Steve Mnuchin did not back down from his earlier comments that suggested a weaker dollar was good for trade. When asked to reaffirm his position while in Davos overnight, Mnuchin said he thought his comments were “quite clear” and “consistent” with what he has said before.
While 10-year yields have risen to 3-4 year highs to start the year, some analysts are suggesting a short-term reversal in the coming days due to pension fund rebalancing. A Bloomberg article today highlights forecasts from a Credit Suisse model that suggests pensions may have to sell as much as $12 billion of U.S. equities and purchase approximately $24 billion of fixed income in order to maintain required portfolio allocations.
Jason Haley
Managing Director, Investment Management Group
| Date | Event | Surv(M) | Actual | Prior | Revised |
| 01/22 | Chicago Fed Nat Activity Index | 0.22 | 0.27 | 0.15 | 0.11 |
| 01/23 | Richmond Fed Manufact. Index | 19 | 14 | 20 | — |
| 01/24 | MBA Mortgage Applications | — | 4.50% | 4.10% | — |
| 01/24 | FHFA House Price Index MoM | 0.50% | 0.40% | 0.50% | 0.60% |
| 01/24 | Markit US Manufacturing PMI | 55 | 55.5 | 55.1 | — |
| 01/24 | Markit US Services PMI | 54.3 | 53.3 | 53.7 | — |
| 01/24 | Markit US Composite PMI | — | 53.8 | 54.1 | — |
| 01/24 | Existing Home Sales | 5.70m | 5.57m | 5.81m | 5.78m |
| 01/24 | Existing Home Sales MoM | -1.90% | -3.60% | 5.60% | 5.10% |
| 01/25 | Jobless claims media lockup canceled – data on website at 8:30 | ||||
| 01/25 | Initial Jobless Claims | 235k | 233k | 220k | 216k |
| 01/25 | Continuing Claims | 1925k | 1937k | 1952k | 1965k |
| 01/25 | Bloomberg Consumer Comfort | — | — | 53.8 | — |
| 01/25 | New Home Sales | 675k | — | 733k | — |
| 01/25 | New Home Sales MoM | -7.90% | — | 17.50% | — |
| 01/25 | Leading Index | 0.50% | — | 0.40% | — |
| 01/25 | Kansas City Fed Manf. Activity | 14 | — | 14 | — |
| 01/26 | Advance Goods Trade Balance | -$68.9b | — | -$69.7b | -$70.0b |
| 01/26 | Wholesale Inventories MoM | 0.40% | — | 0.80% | — |
| 01/26 | Retail Inventories MoM | — | — | 0.10% | — |
| 01/26 | GDP Annualized QoQ | 3.00% | — | 3.20% | — |
| 01/26 | Personal Consumption | 3.70% | — | 2.20% | — |
| 01/26 | GDP Price Index | 2.30% | — | 2.10% | — |
| 01/26 | Core PCE QoQ | 1.90% | — | 1.30% | — |
| 01/26 | Durable Goods Orders | 0.80% | — | 1.30% | — |
| 01/26 | Durables Ex Transportation | 0.60% | — | -0.10% | — |
| 01/26 | Cap Goods Orders Nondef Ex Air | 0.60% | — | -0.20% | — |
| 01/26 | Cap Goods Ship Nondef Ex Air | 0.40% | — | -0.10% | — |