Treasury prices were initially higher overnight but then swung the other direction on reports of Italy budget concessions. European equity markets are higher on the day (Euro Stoxx +0.6%, Italy’s FTSE +1.3%), and S&P 500 futures are up 11 points. While there have been no official announcements, some media reports suggest that Italy’s government is willing to bring down it’s budget deficit target to 2.2% in 2019 (from 2.4% initially) and 2% in 2010, which has sparked a mild risk-on trade in the markets. Fed Chair Powell spoke yesterday and suggested a desire to continue with the gradual tightening mantra while financial conditions remain accommodative, and the Fed would get more aggressive if inflation expectations shifted higher (fairly textbook response). Powell also downplayed yield curve flattening as a major determinant of Fed policy decisions (also not surprising).

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 Sales16.80m17.40m16.60m
10/03MBA Mortgage Applications0.00%2.90%
10/03ADP Employment Change184k230k163k
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 Payrolls181k201k
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