March 17, 2023 Headlines

The overnight trading session was relatively calm, at least compared to the rest of the week, but Treasury yields are moving lower across curve (8-15 basis points) as the morning progresses. China announced a 25 basis point cut in its reserve requirement for banks, which sparked a modest rally in global bonds. The Fed’s H.4.1 report released yesterday showed that the central bank had lent $292 billion to depository institutions for the week ended March 15. This included a $137 billion increase in discount window utilization, as well as $12 billion of the new Bank Term Funding Program announced over the weekend. In addition to the Fed, there has been significant bank borrowing from the FHLB system as well. Most of these borrowed proceeds appear to have ended up deposited at the Fed as institutions build liquidity in a defense of potential deposit outflows. The same report showed total reserves held at the Fed increasing by $435 billion for the weekend ended March 15. The economic calendar is relatively light ahead of next Wednesday’s FOMC meeting.  

Jason Haley
Chief Investment Officer

3/17/23Industrial Production MoM0.20%0.00%
3/17/23Capacity Utilization78.40%78.30%
3/17/23Manufacturing (SIC) Production-0.30%1.00%
3/17/23Leading Index-0.30%-0.30%
3/17/23U. of Mich. Sentiment6767
3/17/23U. of Mich. Current Conditions70.570.7
3/17/23U. of Mich. Expectations64.864.7
3/17/23U. of Mich. 1 Yr Inflation4.10%4.10%
3/17/23U. of Mich. 5-10 Yr Inflation2.90%2.90%
3/21/23Philadelphia Fed Non-Manufacturing Activity3.2
3/21/23Existing Home Sales4.19m4.00m
3/21/23Existing Home Sales MoM4.80%-0.70%
3/22/23MBA Mortgage Applications6.50%
3/22/23FOMC Rate Decision (Upper Bound)5.00%4.75%
3/22/23FOMC Rate Decision (Lower Bound)4.75%4.50%
3/22/23Interest on Reserve Balances Rate4.95%4.65%
3/23/23Current Account Balance-$213.6b-$217.1b
3/23/23Initial Jobless Claims192k
3/23/23Chicago Fed Nat Activity Index0.23
3/23/23Continuing Claims1684k
3/23/23New Home Sales650k670k
3/23/23New Home Sales MoM-3.00%7.20%
3/23/23Kansas City Fed Manf. Activity0
3/24/23Durable Goods Orders1.50%-4.50%
3/24/23Durables Ex Transportation0.30%0.80%
3/24/23Cap Goods Orders Nondef Ex Air0.00%0.80%
3/24/23Cap Goods Ship Nondef Ex Air1.10%
3/24/23S&P Global US Manufacturing PMI4747.3
3/24/23S&P Global US Services PMI50.250.6
3/24/23S&P Global US Composite PMI50.1
3/24/23Revisions: Wholesale Inventories
3/24/23Kansas City Fed Services Activity1

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