Treasury prices are drifting lower following a quiet overnight session, and the 10-year yield is now up more than 20 bps (2.22%) from the YTD low on September 7.   All major global equity indices are higher on the day, and S&P 500 futures are currently up 5 points.  Republicans are expected to finally release details of their tax reform plan on September 25. The effort is being managed by leaders from the House, Senate, and White House, dubbed the “big 6” in the media, and once the plan is released, GOP leaders must agree on parameters that have a chance of passing both the House and Senate. In other words, there’s still a long way to go.

The most noteworthy item on this week’s economic calendar is Wednesday’s FOMC meeting. The committee is widely expected to announce the initiation of its balance-sheet reduction plan, and the bigger question is whether or not they will alter their economic and rate forecasts. The June Summary of Economic Projections (SEP) was still projecting 3 rate hikes in 2017 and three in 2018, but the markets are pricing a much more dovish Fed at the moment. It’s very likely that this week’s updated SEP still shows three hikes in 2017, and the recent improvement in global inflation readings have boosted market expectations for a December hike from 22% on September 7 to 51% this morning.

Jason Haley
Managing Director, Investment Management Group

Date TimeEvent SurveyActualPriorRevised
09/18/2017 10:00NAHB Housing Market IndexSep6768
09/18/2017 16:00Total Net TIC FlowsJul$7.7b
09/18/2017 16:00Net Long-term TIC FlowsJul$34.4b
09/19/2017 08:30Housing StartsAug1174k1155k
09/19/2017 08:30Housing Starts MoMAug1.70%-4.80%
09/19/2017 08:30Building PermitsAug1220k1223k1230k
09/19/2017 08:30Building Permits MoMAug-0.80%-4.10%-3.50%
09/19/2017 08:30Current Account Balance2Q-$116.0b-$116.8b
09/19/2017 08:30Import Price Index MoMAug0.40%0.10%
09/19/2017 08:30Import Price Index ex Petroleum MoMAug0.20%0.00%
09/19/2017 08:30Import Price Index YoYAug2.20%1.50%
09/19/2017 08:30Export Price Index MoMAug0.20%0.40%
09/19/2017 08:30Export Price Index YoYAug0.80%
09/20/2017 07:00MBA Mortgage Applications15-Sep9.90%
09/20/2017 10:00Existing Home SalesAug5.46m5.44m
09/20/2017 10:00Existing Home Sales MoMAug0.40%-1.30%
09/20/2017 14:00FOMC Rate Decision (Upper Bound)20-Sep1.25%1.25%
09/20/2017 14:00FOMC Rate Decision (Lower Bound)20-Sep1.00%1.00%
09/21/2017 08:30Initial Jobless Claims16-Sep300k284k
09/21/2017 08:30Continuing Claims9-Sep1975k1944k
09/21/2017 08:30Philadelphia Fed Business OutlookSep17.118.9
09/21/2017 09:00FHFA House Price Index MoMJul0.40%0.10%
09/21/2017 09:45Bloomberg Consumer Comfort17-Sep51.9
09/21/2017 09:45Bloomberg Economic ExpectationsSep54
09/21/2017 10:00Leading IndexAug0.30%0.30%
09/21/2017 12:00Household Change in Net Worth2Q$2347b
09/22/2017 09:45Markit US Manufacturing PMISep P5352.8
09/22/2017 09:45Markit US Services PMISep P55.756
09/22/2017 09:45Markit US Composite PMISep P55.3
09/25/2017 08:30Chicago Fed Nat Activity IndexAug-0.01
09/25/2017 10:30Dallas Fed Manf. ActivitySep1317