September 16, 2020 Headlines

Treasury prices are moving higher following a weaker-than-expected August retail sales report, although markets are generally quiet ahead of today’s FOMC decision. Advance retail sales rose 0.6% m/m in August versus expectations of a 1% gain. The ex-auto sales figure was also below expectations (0.7% vs. 1.0%), and the July figures for both were revised lower. The bigger surprise was the 0.1% in the retail sales control group (+0.3% expected), which is the figure used in the GDP calculation. Despite the softer August report, consumption is still expected to rebound strongly in the Q3 report.

The FOMC is expected to maintain a very dovish tone in today’s official statement and press conference. One question mark is whether or not they will provide more quantitative forward guidance as a follow-up to the recent framework shift to average inflation targeting. The Fed will also be releasing an updated Summary of Economic Projections (SEP) following today’s meeting.

Jason Haley
Chief Investment Officer

9/15/20Empire Manufacturing6.9173.7
9/15/20Import Price Index MoM0.50%0.90%0.70%1.20%
9/15/20Import Price Index ex Petroleum MoM0.30%0.70%0.20%
9/15/20Import Price Index YoY-2.10%-1.40%-3.30%-2.80%
9/15/20Export Price Index MoM0.40%0.50%0.80%0.90%
9/15/20Export Price Index YoY-3.20%-2.80%-4.40%-3.80%
9/15/20Industrial Production MoM1.00%0.40%3.00%3.50%
9/15/20Capacity Utilization71.40%71.40%70.60%71.10%
9/15/20Manufacturing (SIC) Production1.30%1.00%3.40%3.90%
9/16/20MBA Mortgage Applications-2.50%2.90%
9/16/20Retail Sales Advance MoM1.00%0.60%1.20%0.90%
9/16/20Retail Sales Ex Auto MoM1.00%0.70%1.90%1.30%
9/16/20Retail Sales Ex Auto and Gas0.90%0.70%1.50%1.10%
9/16/20Retail Sales Control Group0.30%-0.10%1.40%0.90%
9/16/20Business Inventories0.10%-1.10%
9/16/20NAHB Housing Market Index7878
9/16/20FOMC Rate Decision (Upper Bound)0.25%0.25%
9/16/20FOMC Rate Decision (Lower Bound)0.00%0.00%
9/16/20Interest Rate on Excess Reserves0.10%0.10%
9/16/20Net Long-term TIC Flows$113.0b
9/16/20Total Net TIC Flows-$67.9b
9/17/20Building Permits1517k1495k1483k
9/17/20Building Permits MoM2.30%18.80%17.90%
9/17/20Housing Starts1483k1496k
9/17/20Housing Starts MoM-0.90%22.60%
9/17/20Philadelphia Fed Business Outlook1517.2
9/17/20Initial Jobless Claims850k884k
9/17/20Continuing Claims13000k13385k
9/17/20Bloomberg Economic Expectations38
9/17/20Bloomberg Consumer Comfort47.8
9/18/20Current Account Balance-$160.0b-$104.2b
9/18/20Leading Index1.30%1.40%
9/18/20U. of Mich. Sentiment7574.1
9/18/20U. of Mich. Current Conditions83.182.9
9/18/20U. of Mich. Expectations67.268.5
9/18/20U. of Mich. 1 Yr Inflation3.00%3.10%
9/18/20U. of Mich. 5-10 Yr Inflation2.70%


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