Global bond markets are rallying following very dovish comments from European Central Bank (ECB) President Mario Draghi. European 10-year bond yields are hitting new record lows today, with the German 10-year down to -0.33% and the French 10-year now at 0% for the first time ever. Treasuries have rallied in sympathy, pushing the 5-year yield below 1.8% and the 10-year yield down to 2.03%. In response to persistent below-target inflation, Draghi said the ECB stands prepared to initiate “further cuts in policy interest rates,” and more importantly from a market perspective, he suggested the asset purchase program “still has considerable headroom.” Risk markets are responding favorably to the latter, with European equities up more than 1.5%, and S&P 500 futures are currently up 0.60%. All eyes are now on the Fed, which will release its decision and guidance tomorrow afternoon.
Housing starts and building permits were both better than expected in May, including an upward revision to April starts. Multifamily starts provided the biggest boost to the May figure (+10.9% m/m), but looking ahead, single-family permits were up 3.7% from the prior month, the first positive monthly change since last November.
Managing Director, Investment Management Group
|6/18/2019||Housing Starts MoM||0.30%||-0.90%||5.70%||6.80%|
|6/18/2019||Building Permits MoM||0.10%||0.30%||0.60%||0.20%|
|6/19/2019||MBA Mortgage Applications||—||—||26.80%||—|
|6/19/2019||FOMC Rate Decision (Upper Bound)||2.50%||—||2.50%||—|
|6/19/2019||FOMC Rate Decision (Lower Bound)||2.25%||—||2.25%||—|
|6/19/2019||Interest Rate on Excess Reserves||2.35%||—||2.35%||—|
|6/20/2019||Current Account Balance||-$124.3b||—||-$134.4b||—|
|6/20/2019||Initial Jobless Claims||220k||—||222k||—|
|6/20/2019||Philadelphia Fed Business Outlook||10.7||—||16.6||—|
|6/20/2019||Bloomberg Consumer Comfort||—||—||61.6||—|
|6/20/2019||Bloomberg Economic Expectations||—||—||52.5||—|
|6/21/2019||Markit US Manufacturing PMI||50.5||—||50.5||—|
|6/21/2019||Markit US Services PMI||51||—||50.9||—|
|6/21/2019||Markit US Composite PMI||—||—||50.9||—|
|6/21/2019||Existing Home Sales||5.26m||—||5.19m||—|
|6/21/2019||Existing Home Sales MoM||1.40%||—||-0.40%||—|
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