Long-end US Treasury yields are slightly higher this morning while risk assets have continued to rally behind optimistic rhetoric regarding US/China trade talks (SPX +0.4%, SSE +0.71%). Today’s economic calendar is light, but the focus will be on the FOMC discussion on inflation expectations and downside risks to the economy. In the statement, the committee maintained the phrase “little changed” when describing inflation expectations. However, before the meeting, five-year-forward inflation expectations fell approximately 30bps mainly due to the significant decline in oil prices. If this is mentioned in the minutes, it would be considered dovish relative to the statement. Additionally, it is expected that officials will continue the theme that subdued inflation will allow the committee to be “patient” and flexible to incoming data.

Chris Eckhoff
Associate, Investment Management Group


01/07Factory orders/durables data postponed by government shutdown   
01/07ISM Non-Manufacturing Index58.560.7
01/08NFIB Small Business Optimism103.3104.8
01/08Trade Balance-$54.0b-$55.5b
01/08JOLTS Job Openings71007079
01/08Consumer Credit$16.000b$25.384b
01/08Advance Goods Trade Balance-$76.0b-$77.2b
01/08Wholesale Inventories MoM0.50%0.80%
01/08Retail Inventories MoM0.90%
01/08New Home Sales568k544k
01/08New Home Sales MoM4.50%-8.90%
01/08Construction Spending MoM0.20%-0.10%
01/08Factory Orders0.30%-2.10%
01/08Factory Orders Ex Trans0.30%
01/08Durable Goods Orders0.80%
01/08Durables Ex Transportation-0.30%
01/08Cap Goods Orders Nondef Ex Air-0.60%
01/08Cap Goods Ship Nondef Ex Air-0.10%
01/09MBA Mortgage Applications-8.50%
01/09FOMC Meeting Minutes
01/10Initial Jobless Claims225k231k
01/10Continuing Claims1710k1740k
01/10Bloomberg Jan. United States Economic Survey   
01/10Bloomberg Consumer Comfort59.6
01/10Wholesale Inventories MoM0.40%
01/10Wholesale Trade Sales MoM-0.20%
01/11CPI MoM-0.10%0.00%
01/11CPI Ex Food and Energy MoM0.20%0.20%
01/11CPI YoY1.90%2.20%
01/11CPI Ex Food and Energy YoY2.20%2.20%
01/11CPI Core Index SA259.481
01/11CPI Index NSA251.065252.038
01/11Real Avg Weekly Earnings YoY0.50%
01/11Real Avg Hourly Earning YoY0.80%
01/11Monthly Budget Statement$0.0b-$204.9b