Escalated tensions between Iran and Pakistan are contributing to a modest rally in Treasuries overnight as both countries exchanged air strikes.
However, yields whipsawed higher following the release of initial jobless claims, which fell sharply to 187,000 last week (lowest since September 2022). Multiple street firms are now predicting the Fed will have to slow the runoff of its Treasury portfolio by the middle of this year to combat an accelerated reduction in its reverse repo balances and ultimately bank reserves. The general premise is that the Fed would want to avoid the scenario in late 2019 when liquidity became scarce and market repo levels spiked. However, several analysts still feel that the Fed won’t alter its current pace of balance sheet reduction until late 2024, at the earliest. This will be a much greater area of market attention at the upcoming FOMC meeting (January 31) and the release of the minutes of that meeting a few weeks later.
Hafizan Hamzah
Senior Director, Investment Management Group
| Date | Event | Survey | Actual | Prior | Revised |
| 1/18/2024 | Housing Starts | 1425k | 1460k | 1560k | 1525k |
| 1/18/2024 | Building Permits | 1477k | 1495k | 1460k | 1467k |
| 1/18/2024 | Housing Starts MoM | -8.70% | -4.30% | 14.80% | 10.80% |
| 1/18/2024 | Building Permits MoM | 0.70% | 1.90% | -2.50% | -2.10% |
| 1/18/2024 | Philadelphia Fed Business Outlook | -6.5 | -10.6 | -10.5 | -12.8 |
| 1/18/2024 | Initial Jobless Claims | 205k | 187k | 202k | 203k |
| 1/18/2024 | Continuing Claims | 1840k | 1806k | 1834k | 1832k |
| 1/19/2024 | U. of Mich. Sentiment | 70 | — | 69.7 | — |
| 1/19/2024 | U. of Mich. Expectations | 66.8 | — | 67.4 | — |
| 1/19/2024 | U. of Mich. Current Conditions | 73 | — | 73.3 | — |
| 1/19/2024 | U. of Mich. 1 Yr Inflation | 3.10% | — | 3.10% | — |
| 1/19/2024 | U. of Mich. 5-10 Yr Inflation | 2.90% | — | 2.90% | — |
| 1/19/2024 | Existing Home Sales | 3.83m | — | 3.82m | — |
| 1/19/2024 | Existing Home Sales MoM | 0.30% | — | 0.80% | — |
| 1/19/2024 | Total Net TIC Flows | — | — | -$83.8b | — |
| 1/19/2024 | Net Long-term TIC Flows | — | — | $3.3b | — |
| 1/22/2024 | Leading Index | -0.30% | — | -0.50% | — |
| 1/23/2024 | Philadelphia Fed Non-Manufacturing Activity | — | — | 6.3 | — |
| 1/23/2024 | Richmond Fed Manufact. Index | — | — | -11 | — |
| 1/23/2024 | Richmond Fed Business Conditions | — | — | 0 | — |
| 1/24/2024 | MBA Mortgage Applications | — | — | 10.40% | — |
| 1/24/2024 | S&P Global US Manufacturing PMI | — | — | 47.9 | — |
| 1/24/2024 | S&P Global US Services PMI | — | — | 51.4 | — |
| 1/24/2024 | S&P Global US Composite PMI | — | — | 50.9 | — |
| 1/25/2024 | Chicago Fed Nat Activity Index | — | — | 0.03 | — |
| 1/25/2024 | GDP Annualized QoQ | 1.80% | — | 4.90% | — |
| 1/25/2024 | Personal Consumption | — | — | 3.10% | — |
| 1/25/2024 | GDP Price Index | 2.00% | — | 3.30% | — |
| 1/25/2024 | Core PCE Price Index QoQ | — | — | 2.00% | — |
| 1/25/2024 | Advance Goods Trade Balance | -$88.4b | — | -$90.3b | -$89.3b |
| 1/25/2024 | Retail Inventories MoM | — | — | -0.10% | — |
| 1/25/2024 | Wholesale Inventories MoM | — | — | -0.20% | — |
| 1/25/2024 | Durable Goods Orders | 0.90% | — | 5.40% | — |
| 1/25/2024 | Durables Ex Transportation | 0.20% | — | 0.40% | — |
| 1/25/2024 | Cap Goods Orders Nondef Ex Air | — | — | 0.80% | — |
| 1/25/2024 | Cap Goods Ship Nondef Ex Air | — | — | -0.20% | — |
| 1/25/2024 | Initial Jobless Claims | — | — | 187k | — |
| 1/25/2024 | Continuing Claims | — | — | 1806k | — |
| 1/25/2024 | New Home Sales MoM | 10.20% | — | -12.20% | — |
| 1/25/2024 | New Home Sales | 650k | — | 590k | — |
| 1/25/2024 | Kansas City Fed Manf. Activity | — | — | -1 | — |
