Treasury prices are slightly lower this morning following a relatively quiet overnight session. Global equity indices are mostly higher, including S&P 500 futures (+3 points), and oil prices are up 1% today, erasing most of yesterday’s decline. Treasury yields have now risen 20-25 bps in the 2yr-10yr part of the curve since last week’s Italy-driven rally. Investor nerves have calmed with regards to Eurozone risks and other macro events and focus now shifts to next week’s FOMC and ECB meetings. A Fed rate hike is expected, and the May FOMC minutes suggested that the rate of interest on excess reserves (IOER) may be divorced from the top-end of the target range by 5 bps (i.e., IOER raised only 20 bps). The Fed will also be releasing its updated economic and rate forecast. For the ECB meeting, the focus will be on the discussion of the current asset purchase program and 1) whether they move to end it in September and 2) if there is any discussion regarding eventual policy tightening.

Jason Haley
Managing Director, Investment Management Group

06/04Factory Orders-0.50%-0.80%1.60%1.70%
06/04Factory Orders Ex Trans0.40%0.30%0.50%
06/04Durable Goods Orders-1.60%-1.70%
06/04Durables Ex Transportation0.90%0.90%
06/04Cap Goods Orders Nondef Ex Air1.00%1.00%
06/04Cap Goods Ship Nondef Ex Air0.90%0.80%
06/05Markit US Services PMI55.756.855.7
06/05Markit US Composite PMI56.655.7
06/05JOLTS Job Openings6350669865506633
06/05ISM Non-Manf. Composite57.758.656.8
06/06MBA Mortgage Applications4.10%-2.90%
06/06Revisions: Trade Balance
06/06Nonfarm Productivity0.60%0.40%0.70%
06/06Unit Labor Costs2.80%2.90%2.70%
06/06Trade Balance-$49.0b-$46.2b-$49.0b-$47.2b
06/07Initial Jobless Claims220k222k221k223k
06/07Continuing Claims1735k1741k1726k1720k
06/07Bloomberg Consumer Comfort55.2
06/07Household Change in Net Worth$2076b
06/07Consumer Credit$14.000b$11.622b
06/08Bloomberg June United States Economic Survey
06/08Wholesale Trade Sales MoM0.30%
06/08Wholesale Inventories MoM0.00%0.00%