US Economy and Credit Markets Week Ended December 2, 2011
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Treasury 10 year notes and 30 year bonds were lower this week as a coordinated effort by the Fed and five other major central banks reduced the cost of dollar funding to European banks and uplifting U.S. economic reports boosted demand for risk assets. Investors maintain concern about the Euro zone, looking forward to an ECB meeting this Thursday followed by an EU summit Friday expecting further clarification on plans to stabilize the situation. In economic news this week, new home sales for October were reported Monday and increased 1.3% to 307,000. The S&P/Case-Shiller Composite declined 0.57% in September and is down 3.59% year over year. Third quarter non-farm productivity was reported Wednesday, increasing 2.3% narrowly missing expectations of 2.5%. October pending home sales increased 10.4% in October, significantly higher than the estimate of 2.0% and are up 7.3% year over year. The ISM manufacturing index was reported at 52.7 on Thursday, higher than the estimate of 51.8. Also Thursday, November total vehicle sales were reported at 13.59 million (annually adjusted) which was higher than the estimate of 13.4 million. November non-farm payrolls increased 120,000 and the unemployment rate declined from 9.0% to 8.6% with some of the decline from a reduction in the labor force. Major economic reports (and related consensus forecasts) for next week include: Monday: November ISM Non-Manufacturing Composite (53.8), October Factory Orders (-0.30%); Wednesday: October Consumer Credit ($7.0B); Thursday:October Wholesale Inventories (0.30%); Friday: October Trade Balance (-$44.0B), December Preliminary U of M Consumer Confidence (65.8).
Posted on Monday, December 5, 2011 @ 8:55 AM

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