Treasury yields are drifting lower this morning following strong performance in global risk markets overnight, particularly Asian equities (Shanghai +2.5%, Hang Seng +1.7%). While there are no major catalysts for today’s positive tone in risk markets, the Bank of Japan did surprise the market by reducing its purchase of long government bonds by 17%, and the Hong Kong dollar unexpectedly surged 60 bps versus the U.S. dollar overnight. U.S. equity traders are preparing for what is expected to be a volatile and high-volume day given two different events impacting stocks. The first event is quadruple witching, which involves the expiration of futures and options on both indexes and individual stocks. This happens on the third Friday of every quarter end and usually results in increased volatility. However, today is more unusual because it is combined with the biggest S&P 500 GICS reclassification since 1999. GICS stands for Global Industry Classification Standard, and this further amplifies the index rebalancing that already occurs on a quadruple witching day. Adult swim only for equities today. Next week’s economic calendar is headlined by the September FOMC meeting on Wednesday. A 25 bps rate hike is all but assured, and market participants will be paying closer attention to the forward guidance and updated economic/rate projections from FOMC participants.
Jason Haley
Managing Director, Investment Management Group
| Date Time | Event | Survey | Actual | Prior | Revised |
| 09/17/2018 | Empire Manufacturing | 23 | 19 | 25.6 | — |
| 09/18/2018 | NAHB Housing Market Index | 66 | 67 | 67 | — |
| 09/18/2018 | Total Net TIC Flows | $46.0b | $52.2b | $114.5b | $189.7b |
| 09/18/2018 | Net Long-term TIC Flows | — | $74.8b | -$36.5b | — |
| 09/19/2018 | MBA Mortgage Applications | — | 1.60% | -1.80% | — |
| 09/19/2018 | Current Account Balance | -$103.4b | -$101.5b | -$124.1b | -$121.7b |
| 09/19/2018 | Housing Starts | 1240k | 1282k | 1168k | 1174k |
| 09/19/2018 | Housing Starts MoM | 5.70% | 9.20% | 0.90% | -0.30% |
| 09/19/2018 | Building Permits | 1310k | 1229k | 1311k | 1303k |
| 09/19/2018 | Building Permits MoM | 0.50% | -5.70% | 1.50% | 0.90% |
| 09/20/2018 | Philadelphia Fed Business Outlook | 18 | 22.9 | 11.9 | — |
| 09/20/2018 | Initial Jobless Claims | 210k | 201k | 204k | — |
| 09/20/2018 | Continuing Claims | 1705k | 1645k | 1696k | — |
| 09/20/2018 | Bloomberg Economic Expectations | — | 57.5 | 57 | — |
| 09/20/2018 | Bloomberg Consumer Comfort | — | 60.2 | 59 | — |
| 09/20/2018 | Leading Index | 0.50% | 0.40% | 0.60% | 0.70% |
| 09/20/2018 | Existing Home Sales | 5.37m | 5.34m | 5.34m | — |
| 09/20/2018 | Existing Home Sales MoM | 0.50% | 0.00% | -0.70% | — |
| 09/20/2018 | Household Change in Net Worth | — | $2191b | $1028b | $1303b |
| 09/21/2018 | Markit US Manufacturing PMI | 55 | — | 54.7 | — |
| 09/21/2018 | Markit US Services PMI | 55 | — | 54.8 | — |
| 09/21/2018 | Markit US Composite PMI | — | — | 54.7 | — |