US Economy and Credit Markets Week Ended June 15, 2012
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Treasuries closed the week modestly higher on the long end of the curve amongst continuing evaluation of Europe's debt crisis and speculation that the Fed may bring more quantitative easing. Yields were slightly lower on Monday as investors sought the safety of US debt as Spanish and Italian bonds sunk. These small gains were wiped out on Tuesday even as 18 Spanish banks were downgraded by Fitch. The month over month import price index was reported exactly as expected. Yields were lower on Wednesday as Moody's downgraded Spain's credit rating to Baa3 from A3. Retail sales declined 0.2% as anticipated but sales ex autos and gas dropped 0.1% against the consensus 0.4% gain. Treasuries were slightly lower Thursday as the 30 year debt auction sold near record lows. The consumer price index reported in line with expectations while initial jobless claims rose to 386,000 versus the projected 375,000. Yields fell on Friday on a number of disappointing US economic data points. Empire manufacturing, industrial production, capacity utilization and U of Michigan confidence were all reported lower than expected. Major economic reports (and related consensus forecasts) for next week include: Tuesday: May Housing Starts (720,000, +0.4% MoM) and May Building Permits (730,000, +1.0% MoM); Wednesday: FOMC Rate Decision (0.25%); Thursday: Initial Jobless Claims (383,000), June Philadelphia Fed Index (0.0), May Existing Home Sales (4.56M, -1.3%), April House Price Index (+0.4%) and May Leading Indicators (0.1%).
Posted on Monday, June 18, 2012 @ 8:24 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.