Treasury prices are lower in response to a rebound in oil prices and equities, particularly in the U.S. and Europe. In addition to the rally in oil prices, markets are responding favorably to headlines suggesting progress in budget negotiations between Italy and the EU (Italy contemplating a reduction in its deficit target). For U.S. equities, investors appear to still be holding closely to Fed Chair Powell’s comments on 10/3 that current policy rates are “a long way from neutral.” If Powell were to temper those hawkish comments in the coming days/weeks, it would likely be a confidence boost for equity markets (i.e., suggest that current rates are close to neutral now). We wouldn’t hold our breath for such a comment, particularly at a time when fresh inflation risks are emerging. However, if Powell does choose to offer a dovish twist to his recent comments, it would perhaps signal that the “Greenspan put” is alive and well under current leadership; a reference to the former Fed chair’s propensity to step in with supportive language and policies when equities struggled.

Powell will speak twice this week, appear first before the Economic Club of New York on Wednesday. Several other Fed leaders are scheduled to speak this week, and the minutes of the November 8 FOMC meeting will be released on Thursday. On the data front, the October personal income/spending and PCE inflation report will be released on Thursday as well.

Jason Haley
Managing Director, Investment Management Group

DateEventSurv(M)ActualPriorRevised
11/26Chicago Fed Nat Activity Index0.180.240.170.14
11/26Dallas Fed Manf. Activity24.529.4
11/27FHFA House Price Index MoM0.40%0.30%
11/27House Price Purchase Index QoQ1.10%
11/27S&P CoreLogic CS 20-City MoM SA0.20%0.09%
11/27S&P CoreLogic CS 20-City YoY NSA5.30%5.49%
11/27S&P CoreLogic CS 20-City NSA Index213.72
11/27S&P CoreLogic CS US HPI NSA Index205.81
11/27S&P CoreLogic CS US HPI YoY NSA5.77%
11/27Conf. Board Consumer Confidence135.8137.9
11/27Conf. Board Present Situation172.8
11/27Conf. Board Expectations114.6
11/28MBA Mortgage Applications-0.10%
11/28Advance Goods Trade Balance-$77.0b-$76.0b-$76.3b
11/28Wholesale Inventories MoM0.40%0.40%
11/28Retail Inventories MoM0.10%
11/28GDP Annualized QoQ3.60%3.50%
11/28Personal Consumption3.70%4.00%
11/28GDP Price Index1.70%1.70%
11/28Core PCE QoQ1.60%1.60%
11/28New Home Sales575k553k
11/28New Home Sales MoM4.00%-5.50%
11/28Richmond Fed Manufact. Index1615
11/29Personal Income0.40%0.20%
11/29Personal Spending0.40%0.40%
11/29Real Personal Spending0.20%0.30%
11/29PCE Deflator MoM0.20%0.10%
11/29PCE Deflator YoY2.10%2.00%
11/29PCE Core MoM0.20%0.20%
11/29PCE Core YoY1.90%2.00%
11/29Initial Jobless Claims220k224k
11/29Continuing Claims1668k
11/29Bloomberg Consumer Comfort61.3
11/29Pending Home Sales MoM0.50%0.50%
11/29Pending Home Sales NSA YoY-3.40%
11/29FOMC Meeting Minutes
11/30Chicago Purchasing Manager58.558.4
12/03Markit US Manufacturing PMI55.4
12/03Construction Spending MoM0.40%0.00%
12/03ISM Manufacturing5857.7
12/03ISM Employment56.8
12/03ISM Prices Paid71.6
12/03ISM New Orders57.4
12/03Wards Total Vehicle Sales17.40m17.50m