US Economy and Credit Markets Week February 6, 2015

 
Treasury yields leapt Friday as jobs growth augmented market expectations for an increase in interest rates. Oil rallied last week, the dollar continued to show strength relative to other currencies and gold fell. The European Central Bank's announced bond-buying program continues impact foreign currency markets and last week Denmark's central bank lowered its interest rate on central-bank deposits to -.75%. The United States economic reports last week were frequent and highlighted an expansionary economic environment. Monday saw the ISM Manufacturing Index decline to 53.5 in January and Personal Income increase .3% during December. The ISM Manufacturing Index recorded its 20th consecutive month above 50 (signaling expansionary conditions) but saw positive sentiment drop during December. In December personal income increased among consumers but their consumption dropped .3%. For the past year Personal Income is up 4.6% while spending has increased 3.6%. Wednesday's ISM Non-Manufacturing Index (measuring the services sector) increased to 56.7 in January, its 50th consecutive month above 50. The trade deficit widened in December as the stronger dollar has harmed exports and the deficit has been particularly impacted by an increase in the consumption of foreign produced goods. Friday revealed nonfarm Payrolls increased 275K in January and December and November payroll numbers were also revised upwards. However, the unemployment rate actually increased for the month as more people entered the labor pool. Major economic reports (and related consensus forecasts) for the upcoming week include: Tuesday: December Wholesale Inventories (.2%, -.6%); Wednesday: Prior Week MBA Mortgage Applications; Thursday: January Retail Sales Advance MoM (-.5%,+.4%) and Prior Week Initial Jobless Claims (288K, +10K); Friday: February Preliminary University of Michigan Consumer Sentiment (98.2, +.1).
Posted on Monday, February 9, 2015 @ 8:32 AM

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.