US Economy and Credit Markets Week Ended July 26, 2019

Treasury prices dropped moderately over the course of the week on more dovish signals from the European Central Bank and optimism on trade. On Tuesday, prices fell as reports that U.S. negotiators will travel to China the following week to restart negotiations on trade put pressure on demand for the perceived safety of Treasurys. In the United Kingdom, pro-Brexit candidate Boris Johnson was elected to be the next Prime Minister, increasing the chances of a no-deal Brexit and uncertainty in the region. Later in the week, the ECB signaled that it would cut short-term interest rates for the first time since 2016 with a new bond-buying program. However, ECB President Mario Draghi did not deliver as dovish of comments as expected and did not provide clarity on the timing and size of easing efforts. The Federal Reserve Bank in the U.S. meets next week and is expected to cut interest rates on Wednesday. Major economic reports (related consensus forecasts, prior data) for the upcoming week include: Tuesday: June Personal Income (0.4%, 0.5%), June Personal Spending (0.3%, 0.4%), July Conf. Board Consumer Confidence (125.0, 121.5); Wednesday: July 26 MBA Mortgage Applications (n/a, -1.9%), July ADP Employment Change (150k, 102k), July MNI Chicago PMI (51.9, 49.7), July 31 FOMC Rate Decision Upper Bound (2.25%, 2.50%); Thursday: July 27 Initial Jobless Claims (215k, 206k), July Final Markit US Manufacturing PMI (n/a, 50.0), July ISM Manufacturing (52.0, 51.7), June Construction Spending MoM (0.4%, -0.8%); Friday: July Change in Nonfarm Payrolls (166k, 224k), July Unemployment Rate (3.7%, 3.7%), June Trade Balance (-$54.5b, -$55.5b), June Factory Orders (0.7%, -0.7%), June Durable Goods Orders (n/a, 2.0%), July Final U. of Mich. Sentiment (98.5, 98.4).
Posted on Monday, July 29, 2019 @ 8:21 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.