March 18, 2020 Headlines

Fixed income markets are more settled this morning (in very relative terms) following yesterday’s big sell-off. Treasury yields rose 20-40 bps on the day, and the yield curve steepened 22 bps, as measured by the 2yr-10yr spread. The 3mo-10yr Treasury spread steepened 40 bps and is currently at 1.02%. Equity markets are set for another rough day, with S&P 500 futures down nearly 4% ahead of the open. The Fed is reopening another 2008-era liquidity vehicle, the Primary Dealer Credit Facility (PDCF). This facility allows primary dealers to borrow against a wide range of collateral for terms up to 90 days at 0.25%. In that way, the facility is very similar to the Fed’s discount window, which is limited to only depository institutions. This should further ease the liquidity pressures in fixed income markets, and the Fed appears ready to establish whatever facilities are needed.

Jason Haley
Chief Investment Officer

3/16/2020Empire Manufacturing3-21.512.9
3/16/2020Net Long-term TIC Flows$20.9b$85.6b
3/16/2020Total Net TIC Flows$122.9b$78.2b$78.7b
3/17/2020Retail Sales Advance MoM0.20%-0.50%0.30%0.60%
3/17/2020Retail Sales Ex Auto MoM0.10%-0.40%0.30%0.60%
3/17/2020Retail Sales Ex Auto and Gas0.30%-0.20%0.40%0.70%
3/17/2020Retail Sales Control Group0.40%0.00%0.00%0.40%
3/17/2020Industrial Production MoM0.40%0.60%-0.30%-0.50%
3/17/2020Capacity Utilization77.10%77.00%76.80%76.60%
3/17/2020Manufacturing (SIC) Production0.20%0.10%-0.10%-0.20%
3/17/2020Business Inventories-0.10%-0.10%0.10%0.00%
3/17/2020JOLTS Job Openings6400696364236552
3/17/2020NAHB Housing Market Index737274
3/18/2020MBA Mortgage Applications-8.40%55.40%
3/18/2020Housing Starts1500k1599k1567k1624k
3/18/2020Housing Starts MoM-4.30%-1.50%-3.60%1.40%
3/18/2020Building Permits1500k1464k1551k1550k
3/18/2020Building Permits MoM-3.20%-5.50%9.20%
3/19/2020Current Account Balance-$108.6b-$124.1b
3/19/2020Revisions: Jobless Claims
3/19/2020Philadelphia Fed Business Outlook836.7
3/19/2020Initial Jobless Claims220k211k
3/19/2020Continuing Claims1738k1722k
3/19/2020Bloomberg Economic Expectations57.5
3/19/2020Bloomberg Consumer Comfort62.7
3/19/2020Leading Index0.10%0.80%
3/20/2020Existing Home Sales5.51m5.46m
3/20/2020Existing Home Sales MoM0.90%-1.30%


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