US Economy and Credit Markets Week Ended December 9, 2011
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Treasury yields were lower across the medium term of the yield curve this week as negative headlines out of Europe and shaky equity markets lifted bond prices. On Thursday, a larger move occurred as ECB president Mario Draghi softened market expectations that the bank would purchase sovereign debt. His comments caused equities to sell off sharply while treasuries rallied, their yields falling to the lowest levels of the month. On Friday, a positive consumer confidence report coupled with an agreement among European leaders in Brussels to expand and accelerate the scope of their proposed rescue fund, pushed stocks higher and caused treasuries to decline after a 3 day rally. Treasuries in the 1-7 year range finished the week slightly higher while 10 and 30 year maturities loosened by 2 and 8bps, respectfully. In economic news for the week, the ISM Non-Manufacturing Index survey was released on Monday, coming in at 52 versus a 53.9 estimate. October consumer credit (reported on Wednesday) expanded to $7.64bln from $7.38bln in the prior month, exceeding estimates of $7bln. Major economic reports (and related consensus forecasts) for next week include: Tuesday: November Retail Sales Less Autos (.6%), October Business Inventories (.8%); Thursday: Empire Manufacturing (3), November MoM Producer Price Index (PPI) (.2%), November Industrial Production (.2%), November Capacity Utilization (77.9%); Friday: November Consumer Price Index (CPI) (.1%)
Posted on Monday, December 12, 2011 @ 9:21 AM

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