Bonds and equities are rallying this morning, with Treasuries 2 to 4 bps lower across the curve and futures on the S&P and Dow up over 0.2%. Yesterday’s weaker-than-expected PPI print sparked a rally in rates that is continuing into today as traders bet on a more accommodative Fed. Equities are being spurred by the truce between the US and China and the prospect of Fed rate cuts.
Housing starts data came out this morning lower than expected, up 1.6% in April as homebuilders continue to sit on large inventories. Homebuilders are struggling to sell homes amidst the affordability crisis. The combination of high mortgage rates and high home prices has made it difficult for would-be buyers to purchase a home. Builders have tried to combat that issue with buydown mortgages, but that has had limited success.
Hafizan Hamzah Senior Director, Investment Management Group
Date Event Surv(M) Actual Prior 5/16/2025 Housing Starts 1364k 1361k 1324k 5/16/2025 Building Permits 1450k 1412k 1467k 5/16/2025 Housing Starts MoM 3.00% 1.60% -11.40% 5/16/2025 Building Permits MoM -1.20% -4.70% 0.50% 5/16/2025 Import Price Index MoM -0.30% 0.10% -0.10% 5/16/2025 Import Price Index ex Petroleum MoM 0.10% 0.40% 0.00% 5/16/2025 Import Price Index YoY -0.20% 0.10% 0.90% 5/16/2025 Export Price Index MoM -0.40% 0.10% 0.00% 5/16/2025 Export Price Index YoY — 2.00% 2.40% 5/16/2025 New York Fed Services Business Activity — -16.2 -19.8 5/16/2025 U. of Mich. Sentiment 53.4 — 52.2 5/16/2025 U. of Mich. Current Conditions 59.9 — 59.8 5/16/2025 U. of Mich. Expectations 48.6 — 47.3 5/16/2025 U. of Mich. 1 Yr Inflation 6.50% — 6.50% 5/16/2025 U. of Mich. 5-10 Yr Inflation 4.40% — 4.40% 5/16/2025 Net Long-term TIC Flows — — $112.0b 5/16/2025 Total Net TIC Flows — — $284.7b
Hafizan Hamzah Senior Director, Investment Management Group
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