US Economy and Credit Markets Ended Sept. 2, 2016
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Treasury prices rose slightly over the course of the week as shorter term Treasuries rose more than longer-term Treasuries. On Monday, Treasuries rose as personal spending and personal income reported in line with analyst expectations. Investors speculated that economic reports in line with expectations would not be enough for the Federal Reserve to raise interest rates during the September meeting. Treasury prices were mixed on Tuesday as Fed Vice Chairman Stanley Fisher gave more hawkish remarks saying it was impossible to say if the next rate hike would be "one and done," and that Janet Yellen's comments were consistent with possibly two increases this year. Treasuries retreated on Wednesday as oil dropped significantly and the employment report was better than expected. On Thursday, Treasuries rebounded, with short-term Treasuries rising the most, as the ISM manufacturing report was weaker than expected and pointed toward contraction. However, initial jobless claims reported in line with expectations. Long-term Treasuries tumbled on Friday while short-term Treasuries remained little-changed as the jobs report was much weaker than expected, causing investors to believe the Fed would not raise rates and fueled a rally in risky assets, such as oil and equities. Oil dropped 7% over the course of the week and gold was little changed. Major economic reports (and related consensus forecasts) for the upcoming holiday-shortened week include: Tuesday: August ISM Non-Manf. Composite (55.0); Wednesday: Sept 2 MBA Mortgage Applications; Thursday: Sept 3 Initial Jobless Claims (265,000); Friday: July Final Wholesale Inventories (0.1% MoM).
Posted on Tuesday, September 6, 2016 @ 9:58 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.