June 23, 2022 Headlines

Treasury yields are another 7-10 basis points lower on the front-end of the curve, with the 2-year yield back below 3% after hitting an end-of-day peak of 3.43% on June 14. Weaker than expected PMI data from Europe further fueled the recent narrative of global recession worries amid ongoing inflation pressures and central bank tightening. Aggregate Eurozone PMI fell to a 16-month low in June while the survey’s inflation measure remained elevated at the highest level since the Eurozone’s creation in 1998. U.S. equity futures are pointing to a modestly higher open with oil futures flat to slightly lower on the day.

Yesterday’s testimony from Fed Chair Powell was largely in line with the Fed’s recent narrative. Powell reiterated their primary commitment to getting inflation down and that achieving a soft landing while doing so would be “very challenging.” The market is now more convinced of the Fed’s resolve to front-load accommodation removal even at the expense of growth and unemployment, and the recent recession narrative and corresponding price rally in Treasuries appear consistent with this understanding. Powell will be testifying again today before the House Financial Services Committee, but there shouldn’t be any new information for markets.  

Jason Haley
Chief Investment Officer

06/21/22Chicago Fed Nat Activity Index0.470.010.470.4
06/21/22Existing Home Sales5.40m5.41m5.61m5.60m
06/21/22Existing Home Sales MoM-3.70%-3.40%-2.40%-2.60%
06/22/22MBA Mortgage Applications4.20%6.60%
06/23/22Current Account Balance-$275.0b-$291.4b-$217.9b-$224.8b
06/23/22Initial Jobless Claims226k229k229k231k
06/23/22Continuing Claims1320k1315k1312k1310k
06/23/22S&P Global US Manufacturing PMI5657
06/23/22S&P Global US Services PMI53.353.4
06/23/22S&P Global US Composite PMI5353.6
06/23/22Kansas City Fed Manf. Activity1023
06/24/22U. of Mich. Sentiment50.250.2
06/24/22U. of Mich. Current Conditions55.455.4
06/24/22U. of Mich. Expectations46.8
06/24/22U. of Mich. 1 Yr Inflation5.40%5.40%
06/24/22U. of Mich. 5-10 Yr Inflation3.30%3.30%
06/24/22New Home Sales590k591k
06/24/22New Home Sales MoM-0.20%-16.60%


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