US Economy and Credit Markets Ended Oct. 25, 2019

Treasury prices dropped moderately over the course of the week on trade negotiations and Brexit news. On Monday, President Donald Trump said that prospects of a U.S.-China trade deal were "coming along great," which caused Treasury prices to drop. On Thursday, China pledged to buy $20B of U.S. agricultural products if a phase-one deal is signed and, on Friday, the U.S. Trade Representative's office said they were close to finalizing some sections of the phase one trade deal, causing a further drop in Treasury prices. On Monday, The U.K. House of Commons voted to agree in principle to Prime Minister Boris Johnson's Brexit deal, but also rejected his short timeline, leading to continued uncertainty as there are still more negotiations to be had. Johnson then called for the U.K to hold a general election on December 12th after Brexit was blocked in Parliament, causing Treasury prices to rise. However, agreeing in principle and a suggestion of another election has reduced the probability of a no-deal Brexit. European Central Bank President Mario Draghi announced the central bank would leave rates unchanged at negative 0.5%. Major economic reports (related consensus forecasts, prior data) for the upcoming week include: Monday: September Prelim. Wholesale Inventories MoM (0.3%, 0.2%); Tuesday: October Conf. Board Consumer Confidence (127.7, 125.1); Wednesday: October 25 MBA Mortgage Applications (n/a, -11.9%), October ADP Employment Change (105k, 135k), 3Q Annualized GDP QoQ (1.6%, 2.0%), October 300 FOMC Rate Decision Upper Bound (1.75%, 2.00%); Thursday: September Personal Income (0.3%, 0.4%), September Personal Spending (0.3%, 0.1%), October 26 Initial Jobless Claims (215k, 212k), October MNI Chicago PMI (48.4, 47.1); Friday: October Change in Nonfarm Payrolls (85k, 136k), October Unemployment Rate (3.6%, 3.5%), October Final Markit US Manufacturing PMI (51.5, 51.5), October ISM Manufacturing (49.0, 47.8), September Construction Spending MoM (0.2%, 0.1%).
Posted on Monday, October 28, 2019 @ 8:09 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.