US Economy and Credit Markets Ended Aug. 12, 2016
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Treasury prices rose slightly over the course of the week as the markets were mostly stable with modest movements on economic data and bond sales. Treasuries were flat on Monday with low volume as investors expected that the Federal Reserve would want to see more data before raising rates despite the prior week's strong jobs report. Treasury prices then rose moderately on Tuesday as a well-received auction of Japanese government bonds showed that there is an appetite for bonds. Short-term bonds sat out the rally as investors have been reluctant to buy short-term Treasuries ahead of the Jackson Hole conference of top central bankers on August 26th. Treasuries continued to climb modestly on Wednesday as a large drop in oil prices led to a pullback in equities and investors were seeking the perceived safety of bonds. The Bank of England also failed to buy as many bonds as it wanted Wednesday in its latest attempt at quantitative easing, highlighting their limitations to execute their QE programs. On Thursday, Treasuries lost most of the week's gains as Initial Jobless Claims dropped slightly from the prior week while the import price index and exports both rose slightly. Oil also rose significantly on Thursday as investors had a more risk-on appetite. Treasuries then rebounded modestly on Friday to end higher for the week as retail sales and wholesale prices both were reported lower than analysts had expected. Oil continued to rise on Friday and finished up 7% on the week. Major economic reports (and related consensus forecasts) for the upcoming week include: Monday: August Empire Manufacturing (2.00); Tuesday: July Housing Starts (1.18M), July CPI (0.0% MoM, 0.9% YoY), July Industrial Production (0.3% MoM), July Capacity Utilization (75.6%); Wednesday: Aug 12 MBA Mortgage Applications; Thursday: Aug 13 Initial Jobless Claims (268,000), July Leading Index (0.3%).
Posted on Monday, August 15, 2016 @ 8:25 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.