US Economy and Credit Markets Ended January 18, 2019

U.S. government bond prices fell last week as positive economic data and increased optimism for a trade deal between the U.S. and China led to more risk-on sentiment. Data released Thursday by the Federal Reserve Bank of Philadelphia showed its manufacturing index rose from 9.1 in December to 17.0 in January, easily beating expectations. The positive report helped ease concerns that manufacturing growth in the U.S. is slowing and helped boost bond yields. A report that Treasury Secretary Steven Mnuchin proposed lifting tariffs on Chinese imports also contributed to a rise in yields, although the Treasury later denied the report. Meanwhile, New York Fed President John Williams said Friday that the Fed will take a patient approach to tightening monetary policy. He added, "The economy is strong, the outlook is healthy and my number one priority is using monetary policy to keep it that way." The reading of industrial production released Friday showed a gain of 0.3% in December over the prior month, beating the estimated gain of 0.2%. The releases of certain economic reports have been postponed due to the partial government shutdown, and future reports may be similarly affected. Major economic reports (related consensus forecasts, prior data) for the upcoming week include: Tuesday: December Existing Home Sales (5.24m, 5.32m); Wednesday: January 18 MBA Mortgage Applications (N/A, 13.5%); Thursday: January 19 Initial Jobless Claims (218k, 213k), January Preliminary Markit US Manufacturing PMI (53.5, 53.8), December Leading Index (-0.1%, 0.2%); Friday: December Preliminary Durable Goods Orders (1.5%, N/A), December New Home Sales (570k, N/A).
Posted on Tuesday, January 22, 2019 @ 8:07 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.