Treasury prices are higher this morning for intermediate and long maturities, but financial markets, in general, are quiet this morning as investors await an announcement from this weekend’s G20 meeting (U.S./China trade). The minutes of the November FOMC meeting were perceived to be on the dovish end of the spectrum. While participants maintained a positive economic outlook and desire for continued “gradual” normalization, the minutes conveyed an emphasis from all participants to base policy decisions on incoming data. More specifically, they may remove the language from the official statement that expresses expectations for “further gradual increases” in the funds rate and replace it with an emphasis on data dependency. In other words, the Fed is effectively saying “don’t pay so much attention to the dots.” The minutes also foreshadowed another downward technical adjustment to the interest on excess reserves (IOER) rate in December (e.g., IOER is increased by 20 bps while the target range rises 25 bps).

Jason Haley
Managing Director, Investment Management Group

11/26Chicago Fed Nat Activity Index0.
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