Negative headlines out of Italy are driving a modest risk-off tone in the markets today, with Treasury prices higher across the curve. Asian markets were relatively quiet overnight (Chinese markets closed all week for holiday), and European equities are down 70-80 bps. S&P 500 futures are currently down 4 points. The head of Italy’s lower house budget committee commented that the country’s fiscal problems would be resolved if it had its own currency (as opposed to the euro). While issuing debt in your own currency more easily allows for the monetization of debt, these comments aren’t exactly what Eurozone officials want to hear as it works though Italy’s budget deficit issues. Italy surprised markets (and eurozone officials) when it recently announced a budget deficit goal of 2.4% of GDP, which effectively violates Eurozone rules, and despite pushback from Brussels, Italian leaders have so far refused to budge from current fiscal plans. Italy has the fourth largest public debt market in the world among developed nations, so markets tend to pay closer attention given the circumstances. Most assume that an agreement between eurozone and Italian officials will eventually be reached, but in the meantime, it could spark pockets of volatility in global markets.

Jason Haley
Managing Director, Investment Management Group


10/01Markit US Manufacturing PMI55.655.655.6
10/01Construction Spending MoM0.40%0.10%0.10%
10/01ISM Manufacturing6059.861.3
10/01ISM Employment58.858.5
10/01ISM Prices Paid71.466.972.1
10/01ISM New Orders61.865.1
10/02Wards Total Vehicle Sales16.80m16.60m
10/03MBA Mortgage Applications2.90%
10/03ADP Employment Change184k163k
10/03Markit US Services PMI5352.9
10/03Markit US Composite PMI53.4
10/03ISM Non-Manufacturing Index5858.5
10/04Challenger Job Cuts YoY13.70%
10/04Initial Jobless Claims215k214k
10/04Continuing Claims1665k1661k
10/04Bloomberg Consumer Comfort61.2
10/04Factory Orders2.10%-0.80%
10/04Factory Orders Ex Trans0.20%
10/04Durable Goods Orders4.50%4.50%
10/04Durables Ex Transportation0.10%
10/04Cap Goods Orders Nondef Ex Air-0.50%
10/04Cap Goods Ship Nondef Ex Air0.10%
10/05Trade Balance-$53.5b-$50.1b
10/05Change in Nonfarm Payrolls184k201k
10/05Two-Month Payroll Net Revision
10/05Change in Private Payrolls180k204k
10/05Change in Manufact. Payrolls15k-3k
10/05Unemployment Rate3.80%3.90%
10/05Underemployment Rate7.40%
10/05Average Hourly Earnings MoM0.30%0.40%
10/05Average Hourly Earnings YoY2.80%2.90%
10/05Average Weekly Hours All Employees34.534.5
10/05Labor Force Participation Rate62.70%62.70%
10/05Consumer Credit$15.000b$16.640b