US Economy and Credit Markets Ended Oct. 28, 2016
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Treasury prices dropped over the course of the week on economic news and increased expectations of hawkish policies from the Federal Reserve and other Central Banks around the world. On Monday, Treasury prices fell modestly as the Markit US Manufacturing PMI was stronger than expected and there was significant M&A activity in the equity markets. After little movement on Tuesday, Treasury prices fell again on Wednesday as expectations for a rate hike before the end of the year moved higher. On Thursday, the Bank of Japan governor said they would like a steeper yield curve which, along with a stronger GDP reading in the U.K., caused Treasuries to drop further as investors believed that monetary policy around the world will be tightened. On Friday, Treasuries rebounded slightly as the FBI reopened the investigation on presidential candidate Hillary Clinton. Oil ended the week down 4% and the market implied expectation of a rate hike in December ended at 69.9%. Major economic reports (and related consensus forecasts) for the upcoming week include: Monday: September Personal Income (0.4%), September Personal Spending (0.5%), October Chicago Purchasing Manager (54.0); Tuesday: October Final Markit US Manufacturing PMI (53.2), October ISM Manufacturing (51.7); Wednesday: October 28 MBA Mortgage Applications, October ADP Employment Change (165,000), FMOC Rate Decision (0.50% Upper Bound); October 29 Initial Jobless Claims (256,000), September Factory Orders (0.2%), September Final Durable Goods Orders; Friday: September Trade Balance (-$39.0B), October Change in Nonfarm Payrolls (175,000), October Unemployment Rate (4.9%).
Posted on Monday, October 31, 2016 @ 8:01 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.