Overnight weakness in global equity markets is sparking a bid for Treasuries this morning, with yields 1-2 bps lower across the curve. Today’s sentiment in risk markets is mostly attributable to Chinese economic concerns and continued weakness in crude oil prices. Regarding the latter, West Texas Intermediate (WTI) futures are down 1.6% today to the lowest level in 8 months. WTI prices have now fallen 10 consecutive days and are now down 17% on the month.  (WTI -1.3% and -17% MTD).

Yesterday’s FOMC meeting was largely a snoozer, as expected. The official statement had no significant changes. It did acknowledge that household spending “continued to grow strongly” since the last meeting, and “business investment moderated form its rapid pace earlier in the year.” The market response to the statement was muted, and the minutes of the meeting (released in 3 weeks) may provide additional clarity on any discussion of the terminal value of the Fed’s balance sheet and the interest on excess reserves (IOER) rate relative to the effective fed funds rate.

Jason Haley
Managing Director, Investment Management Group


11/05Markit US Services PMI54.654.854.7
11/05Markit US Composite PMI54.954.8
11/05ISM Non-Manufacturing Index5960.361.6
11/06JOLTS Job Openings708570097136
11/07MBA Mortgage Applications-4.00%-2.50%
11/07Consumer Credit$15.000b$10.923b$20.078b
11/08Initial Jobless Claims214k214k214k
11/08Continuing Claims1634k1623k1631k
11/08Bloomberg Consumer Comfort61.360.3
11/08Mortgage Delinquencies4.47%4.36%
11/08MBA Mortgage Foreclosures0.99%1.05%
11/08FOMC Rate Decision (Upper Bound)2.25%2.25%2.25%
11/08FOMC Rate Decision (Lower Bound)2.00%2.00%2.00%
11/08Interest Rate on Excess Reserves2.20%2.20%2.20%
11/09PPI Final Demand MoM0.20%0.60%0.20%
11/09PPI Ex Food and Energy MoM0.20%0.50%0.20%
11/09PPI Ex Food, Energy, Trade MoM0.20%0.20%0.40%
11/09PPI Final Demand YoY2.50%2.90%2.60%
11/09PPI Ex Food and Energy YoY2.30%2.60%2.50%
11/09PPI Ex Food, Energy, Trade YoY2.80%2.90%
11/09Bloomberg Nov. United States Economic Survey (Table)
11/09Wholesale Inventories MoM0.30%0.30%
11/09Wholesale Trade Sales MoM0.40%0.80%
11/09U. of Mich. Sentiment9898.6
11/09U. of Mich. Current Conditions114.9113.1
11/09U. of Mich. Expectations87.289.3
11/09U. of Mich. 1 Yr Inflation2.90%
11/09U. of Mich. 5-10 Yr Inflation2.40%