Treasury prices are moving higher this morning following a weak Eurozone inflation report for April (weakest core reading in over a year). Asian equity markets were mixed overnight (Japan closed for holiday), and European equities are 30-40 basis points lower. In the U.S., S&P 500 futures are 6 points lower ahead of the open. The U.S./China trade summit began in Beijing today, and there are no developments/announcements to this point. U.S. negotiations are being led by Treasury Secretary Steve Mnuchin, and there appear to be a wide range of expectations regarding the ultimate results of this 2-day meeting (positive and negative). It’s unlikely that a comprehensive resolution will be reached, but some short-term measures could be agreed upon in an effort to keep good-faith negotiations moving forward (and for political cover).

On the date front, initial jobless claims rose slightly for the week ended April 28, but the 4-week moving average of jobless claims reached a fresh 49-year low. However, if adjusted for labor force growth since records began in 1967, jobless claims have been holding at all-time lows for some time. The April jobs report will be released tomorrow morning, and the market is currently expecting payrolls to add 193,000 jobs and the headline unemployment rate to fall 10 bps to 4%.

Jason Haley
Managing Director, Investment Management Group

Date Time Event Survey Actual Prior Revised
05/01/2018 Markit US Manufacturing PMI 56.5 56.5 56.5
05/01/2018 Construction Spending MoM 0.50% -1.70% 0.10% 1.00%
05/01/2018 ISM Manufacturing 58.5 57.3 59.3
05/01/2018 ISM Employment 54.2 57.3
05/01/2018 ISM Prices Paid 78.5 79.3 78.1
05/01/2018 ISM New Orders 61.2 61.9
05/01/2018 Wards Release April Auto Data — Excluding GM
05/02/2018 MBA Mortgage Applications -2.50% -0.20%
05/02/2018 ADP Employment Change 198k 204k 241k 228k
05/02/2018 FOMC Rate Decision (Upper Bound) 1.75% 1.75% 1.75%
05/02/2018 FOMC Rate Decision (Lower Bound) 1.50% 1.50% 1.50%
05/03/2018 Challenger Job Cuts YoY -1.40% 39.40%
05/03/2018 Nonfarm Productivity 0.90% 0.70% 0.00% 0.30%
05/03/2018 Unit Labor Costs 3.00% 2.70% 2.50% 2.10%
05/03/2018 Initial Jobless Claims 225k 211k 209k
05/03/2018 Continuing Claims 1835k 1756k 1837k 1833k
05/03/2018 Trade Balance -$50.0b -$49.0b -$57.6b -$57.7b
05/03/2018 Bloomberg Consumer Comfort 57.5
05/03/2018 Markit US Services PMI 54.5 54.4
05/03/2018 Markit US Composite PMI 54.8
05/03/2018 ISM Non-Manf. Composite 58 58.8
05/03/2018 Factory Orders 1.40% 1.20%
05/03/2018 Factory Orders Ex Trans 0.10%
05/03/2018 Durable Goods Orders 2.60%
05/03/2018 Durables Ex Transportation 0.00%
05/03/2018 Cap Goods Orders Nondef Ex Air -0.10%
05/03/2018 Cap Goods Ship Nondef Ex Air -0.70%
05/04/2018 Change in Nonfarm Payrolls 193k 103k
05/04/2018 Two-Month Payroll Net Revision -50k
05/04/2018 Change in Private Payrolls 190k 102k
05/04/2018 Change in Manufact. Payrolls 20k 22k
05/04/2018 Unemployment Rate 4.00% 4.10%
05/04/2018 Underemployment Rate 8.00%
05/04/2018 Average Hourly Earnings MoM 0.20% 0.30%
05/04/2018 Average Hourly Earnings YoY 2.70% 2.70%
05/04/2018 Average Weekly Hours All Employees 34.5 34.5
05/04/2018 Labor Force Participation Rate 62.90% 62.90%
05/07/2018 Consumer Credit $16.000b $10.601b
05/07/2018 Mortgage Delinquencies 5.17%
05/07/2018 MBA Mortgage Foreclosures 1.19%
05/08/2018 NFIB Small Business Optimism 105 104.7
05/08/2018 JOLTS Job Openings 6052
05/09/2018 MBA Mortgage Applications -2.50%
05/09/2018 PPI Final Demand MoM 0.20% 0.30%
05/09/2018 PPI Ex Food and Energy MoM 0.20% 0.30%
05/09/2018 PPI Ex Food, Energy, Trade MoM 0.30% 0.40%
05/09/2018 PPI Final Demand YoY 2.80% 3.00%
05/09/2018 PPI Ex Food and Energy YoY 2.40% 2.70%
05/09/2018 PPI Ex Food, Energy, Trade YoY 2.90%
05/09/2018 Wholesale Trade Sales MoM 1.00%
05/09/2018 Wholesale Inventories MoM 0.50%
05/10/2018 CPI MoM 0.30% -0.10%
05/10/2018 CPI Ex Food and Energy MoM 0.20% 0.20%
05/10/2018 CPI YoY 2.50% 2.40%
05/10/2018 Initial Jobless Claims 211k
05/10/2018 CPI Ex Food and Energy YoY 2.20% 2.10%
05/10/2018 Continuing Claims 1756k
05/10/2018 CPI Index NSA 249.554
05/10/2018 CPI Core Index SA 256.2
05/10/2018 Real Avg Weekly Earnings YoY 0.90%
05/10/2018 Real Avg Hourly Earning YoY 0.40%
05/10/2018 Bloomberg May United States Economic Survey
05/10/2018 Bloomberg Consumer Comfort
05/10/2018 Monthly Budget Statement -$208.7b