Treasuries prices are moving higher following the European Central Bank’s (ECB) decision to add accommodation. Both European and U.S. equities have rallied following the announcement, with the Euro Stoxx up 84 bps from the overnight low. The ECB cut its 2019 GDP forecast for the Eurozone from 1.7% to 1.1%, and starting in September, the central bank will offer banks a round of long-term loans for the first time since 2016. ECB President Mario Draghi said the decision was unanimous, and he confirmed that the measures taken will add accommodation.
Looking back to early last year, the markets were expecting the ECB to begin the policy normalization process in 2019, and just three months ago, policymakers voted to end the central bank’s quantitative easing program. However, sluggish growth and inflation data is now causing ECB leaders to pivot and once again increase accommodation. To be fair, many analysts feel that the ECB’s bond-buying program was ended early despite downside growth risks because of the political factors (limits on issuance by country that impeded effectiveness). By re-introducing the long-term loan program and adding accommodation, the central bank can maintain its characterization of risks being “tilted to the downside.” Today’s decision fuels further monetary policy divergence between the U.S. and Europe, and euro is down 50 bps versus the dollar following the announcement.
Jason HaleyManaging Director, Investment Management Group
| Date Time | Event | Survey | Actual | Prior | Revised |
| 3/4/2019 | Conference Board Revises January LEI Report | ||||
| 3/4/2019 | Construction Spending MoM | 0.10% | -0.60% | 0.80% | — |
| 3/5/2019 | Markit US Services PMI | 56.2 | 56 | 56.2 | — |
| 3/5/2019 | Markit US Composite PMI | — | 55.5 | 55.8 | — |
| 3/5/2019 | ISM Non-Manufacturing Index | 57.4 | 59.7 | 56.7 | — |
| 3/5/2019 | New Home Sales | 600k | 621k | 657k | 599k |
| 3/5/2019 | New Home Sales MoM | -8.70% | 3.70% | 16.90% | 9.10% |
| 3/5/2019 | Monthly Budget Statement | $10.0b | $8.7b | $49.2b | — |
| 3/6/2019 | MBA Mortgage Applications | — | -2.50% | 5.30% | — |
| 3/6/2019 | ADP Employment Change | 190k | 183k | 213k | 300k |
| 3/6/2019 | Trade Balance | -$57.9b | -$59.8b | -$49.3b | -$50.3b |
| 3/6/2019 | U.S. Federal Reserve Releases Beige Book | ||||
| 3/7/2019 | Challenger Job Cuts YoY | — | 117.20% | 18.70% | — |
| 3/7/2019 | Initial Jobless Claims | 225k | 223k | 225k | 226k |
| 3/7/2019 | Continuing Claims | 1772k | 1755k | 1805k | — |
| 3/7/2019 | Nonfarm Productivity | 1.50% | 1.90% | 2.30% | 1.80% |
| 3/7/2019 | Unit Labor Costs | 1.70% | 2.00% | 0.90% | 1.60% |
| 3/7/2019 | Bloomberg Consumer Comfort | — | 62.1 | 61 | — |
| 3/7/2019 | Household Change in Net Worth | — | — | $2070b | — |
| 3/7/2019 | Consumer Credit | $17.000b | — | $16.554b | — |
| 3/8/2019 | Housing Starts | 1190k | — | 1078k | — |
| 3/8/2019 | Housing Starts MoM | 10.40% | — | -11.20% | — |
| 3/8/2019 | Building Permits | 1289k | — | 1326k | — |
| 3/8/2019 | Building Permits MoM | -2.80% | — | 0.30% | — |
| 3/8/2019 | Change in Nonfarm Payrolls | 180k | — | 304k | — |
| 3/8/2019 | Two-Month Payroll Net Revision | — | — | — | — |
| 3/8/2019 | Change in Private Payrolls | 175k | — | 296k | — |
| 3/8/2019 | Change in Manufact. Payrolls | 11k | — | 13k | — |
| 3/8/2019 | Unemployment Rate | 3.90% | — | 4.00% | — |
| 3/8/2019 | Average Hourly Earnings MoM | 0.30% | — | 0.10% | — |
| 3/8/2019 | Average Hourly Earnings YoY | 3.30% | — | 3.20% | — |
| 3/8/2019 | Average Weekly Hours All Employees | 34.5 | — | 34.5 | — |
| 3/8/2019 | Labor Force Participation Rate | 63.20% | — | 63.20% | — |
| 3/8/2019 | Underemployment Rate | — | — | 8.10% | — |