Investors fled into bonds on Thursday last week, as President Donald Trump announced plans to institute import tariffs on steel and aluminum of 25% and 10% respectively. U.S. Treasurys quickly reversed those gains on Friday as traders and strategists expressed worries about rising prices and inflation. The ISM Manufacturing Index rose to the highest level since 2004, coming in at 60.8 in February, well above the consensus expected 58.7. Generally speaking, levels higher than 50 signal expansion, while levels below 50 signal contraction. Federal Reserve Chairman Jerome Powell spent two days testifying before Congress last week, where he offered an upbeat view of the U.S. economy. In December, Fed officials projected that there would be three interest rate increases in 2018, but Chairman Powell's comments signaled that more hikes may be considered if the economy continued to expand. As a result, markets seem to be pricing in the possibility of four rate hikes in 2018. Major economic reports (related consensus forecasts, prior data) for the upcoming week include: Tuesday: January Final Durable Goods Orders (N/A, -3.7%), Factory Orders (-1.2%, 1.7%); Wednesday: March 2 MBA Mortgage Applications (N/A, 2.7%), February ADP Employment Change (195k, 234k), January Trade Balance (-$55.0b, -$53.1b); Thursday: March 3 Initial Jobless Claims (220k, 210k); Friday: February Change in Nonfarm Payrolls (200k, 200k), February Unemployment Rate (4.0%, 4.1%), January Final Wholesale Inventories MoM (0.7%, 0.7%).
Posted on Monday, March 5, 2018 @ 8:11 AM
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