US Economy and Credit Markets Week Ended June 29, 2012

Treasury yields were generally unchanged this week as the flight to safety early in the week was offset by optimism coming out of the Eurozone summit in Brussels on Friday. EU leaders surprised investors by agreeing to relax restrictions on the use of bailout funds sending riskier assets higher at the expense of U.S. Treasuries. Earlier in the week, Treasury prices were higher as Angela Merkel dismissed the notion of euro bonds and joint liability. In domestic economic news, new home sales surprised to the upside Monday increasing 7.6% to 369,000 vs. expectations of 347,000. Wednesday, durable goods orders were reported 1.1% higher in May, beating the consensus estimate of 0.4%. Excluding transportation, orders increased 0.4%, below expectations of 0.7%. First quarter GDP growth was finalized Thursday at 1.9%, matching estimates. Friday, personal income was reported 0.2% higher in May, matching expectations and spending was flat, also matching estimates. Markets will close early next Tuesday and will be closed Wednesday in observance of the U.S. Independence Day Holiday. Major economic reports (and related consensus forecasts) for next week include: Monday: June ISM Manufacturing and Prices Paid (52.0 and 45.8 respectively), May Construction Spending (0.2%); Tuesday: May Factory Orders (0.1%), June Total and Domestic Vehicle Sales Annualized (13.9 million and 10.89 million respectively), Thursday: June ISM Non-Manufacturing Composite (53.0); Friday: June Change in Nonfarm Payrolls (90,000), June Change in Private Payrolls (100,000), June Change in Manufacturing Payrolls (8,000), June Unemployment Rate (8.2%).
Posted on Monday, July 2, 2012 @ 8:31 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.