Weekly Market Update

April PCE Inflation as Expected but Spending Slows Treasuries are rallying a bit after this morning’s Personal Income and Spending Report saw inflation as expected but with definite slowing in spending (more on that below). Currently, the 10yr note is yielding 4.50%, down 5bps on the day while the 2yr is yielding 4.90%, down 3bps…

New Supply Keeping Treasuries Under Pressure Treasuries are still feeling some pressure this morning after the so-so 2yr and 3yr auctions from yesterday, boosted along with the standard hawkish Fed Speak. Today offers more new supply in the form of 7yr notes so the mood may not improve until we’re past that event. Currently, the…

Don’t Count on a Slowing Economy Just Yet Treasury yields are a bit higher this morning after a better-than-expected preliminary durable goods report for April and that follows a better-than-expected S&P May PMI report yesterday. So, as questions return as to whether the economy is really slowing, yields find themselves on the back front as…

Fed Speak Continues to Promise Higher-for-Longer Treasury yields are moving a bit higher in sympathy with a hotter-than-expected UK CPI print. Supply could also be weighing slightly on the market with $16 billion in 20yr notes being auctioned this afternoon. Meanwhile, equity investors will be focused on the Nvidia earnings after the bell and that…

Treasury Yields Drift Higher as New Supply Weighs on Market Treasury yields are moving a bit higher as supply weighs on the market, but a dearth of data this week should keep any moves limited. Corporate supply will be heavy this week, with most of it frontloaded into today and tomorrow, while a 20yr Treasury…

Are Consumers Finally Starting to Buckle Under Higher Rates? Treasuries are drifting around unchanged as investors ready for the weekend. Fed speak yesterday was pretty much on script as to higher-for-longer and policy is in a good place for the time being.  A couple more Fed officials (Williams and Daly) go today but one is…

Treasuries Rally on Friendlier Inflation and Slowing Retail Sales Treasuries are rallying on a better inflation report for April – not great but better than the first quarter- and retail sales that disappointed and adds to other recent reports that point to some slowing in both jobs and consumption (more on both below). Rate-cutting odds…

Inflation Week Arrives Treasuries open Inflation Week in the green as investors look ahead to PPI numbers tomorrow followed by the headlining CPI Report on Wednesday. Obviously, investors are hoping for signs of cooling after the string of hot inflation numbers in the first quarter. Currently, the 10yr note is yielding 4.47%, up 7/32nds in…

Investor Attention Will Quickly Turn to Next Week’s CPI Report Treasury yields are slightly higher this morning but the moves are rather listless as the market awaits the University of Michigan Sentiment Survey and its inflation expectations later this morning. It’s the last bit of data in a week bereft of meaningful new inputs, but…

Plenty of Fed Speak This Week After Soft Jobs Report The return of geopolitical risk is adding to the rally in Treasuries that started after Friday’s softer employment report and that has yields dipping farther in response. Israel has told civilians to leave the Rafah area of Gaza as an attack in the area seems…

April Employment Report Hints at Some Softness Nonfarm payroll gains for April were 175 thousand vs. 244 thousand expected and 315 thousand in March (revised up from an initial 303 thousand). Meanwhile, February was revised lower by 34 thousand jobs, and that continues a year-long trend of downward two-month revisions.  Private sector jobs increased 167…

Meeting Highlights  As expected, the Fed kept the funds rate range unchanged at 5.25% – 5.50% and Powell’s comments were less hawkish than was expected, but there was disappointment expressed regarding the inflation news so far in 2024. This was acknowledged in the statement with this new addition: “In recent months, there has been a…