US Economy and Credit Markets Week Ended Mar. 27, 2014

Bob Carey
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US Economy and Credit Markets Week Ended Mar. 27, 2014

Posted Under: Weekly Market Commentary

Government debt showed some volatility this week amid tensions in the Crimean peninsula, speculation over rate increases, and mixed economic reports. On Monday longer dated treasuries moved higher, tightening the spread between long and short dated maturity yields as investors speculated that the Federal Reserve would raise interest rates sooner than expected. Yet Treasuries reversed course the next day as March Consumer Confidence Data was better than expected, printing at 82.3 vs. expectations of 78.5. Midweek economic data showed Durable Goods Orders for February beat expectations rising 2.2%, prompting speculation that the economy would recover faster than expected. The strong data supported the theory that the Fed may hike rates and Treasuries rallied broadly amid rising tension surrounding Russia's annexation of Crimea. On Thursday, Q4 GDP was reported at 2.6%, just missing survey estimates, while Personal Consumption advanced 3.3%, exceeding analyst estimates for a 2.7% increase, and Feb. Pending Home Sales fell -10.2% YoY. On Friday, reports showed a strong rebound in U.S. consumer data as Feb. Personal Income and Spending each advanced .3% MoM, causing Treasuries to drop slightly lower, but still close the week higher for longer durations. Major economic reports (and related consensus forecasts) for the upcoming week include: Monday: Mar. Chicago Purchasing Manager Index (58.5); Tuesday: Mar. ISM Manufacturing (54.0), Mar. Dom Vehicles, Feb. Construction Spending (+.1% MoM), and Mar. ISM Prices Paid (59.0); Wednesday: Mar. ADP Employment Change (190k) and Feb. Factory Orders (.8%); Thursday: Feb. Trade Balance (-38.5B) and Mar. ISM Non-Manf. Composite (53.5); Friday: Mar. Change in Nonfarm Payrolls (190k) and Mar. Unemployment Rate (6.6%).

Posted on Monday, March 31, 2014 @ 8:49 AM • Post Link	Share:
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.

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