A significant flight to safety trade evolved overnight in the wake of two bank failures (Silicon Valley Bank and Signature Bank). The 2-year Treasury yield is down 45 basis points (bps) in early trading to 4.13% as of 8:57 am ET, and the 10-year yield is down 25 bps to 3.45%. Federal regulators announced measures late yesterday to stem any contagion risk in the banking system as a whole. Depositors at both failed banks will receive all their money (insured and uninsured), and the Fed has established a Bank Term Funding Program to provide loans up to 1 year against depository securities at a par valuation to provide liquidity in the event of deposit outflows. Despite the measures, markets are expectedly choppy to start the day. Agency MBS spreads are wider on expected sales by banks, including the remaining held-to-maturity position of Silicon Valley Bank. Spreads of regional bank debt are 20-50 bps wider versus Treasuries in the last two trading sessions, and the very largest banks (GSIBs) are experiencing less widening (approximately 15 bps in a more uniform move). The government will likely respond with more measures to restore confidence in the banking system if needed, and we will have additional commentary available this morning. In short, SVB was a very unique model with an undiversified funding base, and despite the effects of the Fed’s extraordinary interest rate policy swing of the last three years, the system, as a whole, remains very well capitalized.
Jason Haley
Chief Investment Officer
| Date | Event | Survey | Actual | Prior | Revised |
| 3/14/23 | NFIB Small Business Optimism | 90.3 | — | 90.3 | — |
| 3/14/23 | Real Avg Hourly Earning YoY | — | — | -1.80% | -1.90% |
| 3/14/23 | Real Avg Weekly Earnings YoY | — | — | -1.50% | -1.90% |
| 3/14/23 | CPI MoM | 0.40% | — | 0.50% | — |
| 3/14/23 | CPI Ex Food and Energy MoM | 0.40% | — | 0.40% | — |
| 3/14/23 | CPI YoY | 6.00% | — | 6.40% | — |
| 3/14/23 | CPI Ex Food and Energy YoY | 5.50% | — | 5.60% | — |
| 3/14/23 | CPI Index NSA | 300.86 | — | 299.17 | — |
| 3/14/23 | CPI Core Index SA | 303.736 | — | 302.702 | — |
| 3/15/23 | MBA Mortgage Applications | — | — | 7.40% | — |
| 3/15/23 | PPI Final Demand MoM | 0.30% | — | 0.70% | — |
| 3/15/23 | PPI Ex Food and Energy MoM | 0.40% | — | 0.50% | — |
| 3/15/23 | PPI Ex Food, Energy, Trade MoM | 0.30% | — | 0.60% | — |
| 3/15/23 | PPI Final Demand YoY | 5.40% | — | 6.00% | — |
| 3/15/23 | PPI Ex Food and Energy YoY | 5.20% | — | 5.40% | — |
| 3/15/23 | PPI Ex Food, Energy, Trade YoY | 4.90% | — | 4.50% | — |
| 3/15/23 | Empire Manufacturing | -8 | — | -5.8 | — |
| 3/15/23 | Retail Sales Advance MoM | -0.30% | — | 3.00% | — |
| 3/15/23 | Retail Sales Ex Auto MoM | -0.10% | — | 2.30% | — |
| 3/15/23 | Retail Sales Ex Auto and Gas | -0.20% | — | 2.60% | — |
| 3/15/23 | Retail Sales Control Group | -0.30% | — | 1.70% | — |
| 3/15/23 | Business Inventories | 0.00% | — | 0.30% | — |
| 3/15/23 | NAHB Housing Market Index | 41 | — | 42 | — |
| 3/15/23 | Net Long-term TIC Flows | — | — | $152.8b | — |
| 3/15/23 | Total Net TIC Flows | — | — | $28.6b | — |
| 3/16/23 | Initial Jobless Claims | 205k | — | 211k | — |
| 3/16/23 | Import Price Index MoM | -0.20% | — | -0.20% | — |
| 3/16/23 | Import Price Index ex Petroleum MoM | 0.00% | — | 0.20% | — |
| 3/16/23 | Import Price Index YoY | -1.10% | — | 0.80% | — |
| 3/16/23 | Export Price Index MoM | -0.30% | — | 0.80% | — |
| 3/16/23 | Continuing Claims | 1698k | — | 1718k | — |
| 3/16/23 | Export Price Index YoY | — | — | 2.30% | — |
| 3/16/23 | Housing Starts | 1310k | — | 1309k | — |
| 3/16/23 | Building Permits | 1345k | — | 1339k | — |
| 3/16/23 | Housing Starts MoM | 0.10% | — | -4.50% | — |
| 3/16/23 | Building Permits MoM | 0.50% | — | 0.10% | — |
| 3/16/23 | Philadelphia Fed Business Outlook | -15 | — | -24.3 | — |
| 3/16/23 | New York Fed Services Business Activity | — | — | -12.8 | — |
| 3/17/23 | Industrial Production MoM | 0.20% | — | 0.00% | — |
| 3/17/23 | Capacity Utilization | 78.40% | — | 78.30% | — |
| 3/17/23 | Manufacturing (SIC) Production | -0.30% | — | 1.00% | — |
| 3/17/23 | Leading Index | -0.30% | — | -0.30% | — |
| 3/17/23 | U. of Mich. Sentiment | 67 | — | 67 | — |
| 3/17/23 | U. of Mich. Current Conditions | — | — | 70.7 | — |
| 3/17/23 | U. of Mich. Expectations | 64.8 | — | 64.7 | — |
| 3/17/23 | U. of Mich. 1 Yr Inflation | 4.00% | — | 4.10% | — |
| 3/17/23 | U. of Mich. 5-10 Yr Inflation | 2.90% | — | 2.90% | — |
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