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Weekly Market Commentary

09.17.18

Last week gave us a third consecutive week of rising Treasury market rates. The slope of the yield curve flattened through the 3-yr, 10-yr and 30-yr auction packages, but gave up some of the steepening after the auctions. Comments by mainstream Fed policymakers continued to point toward more gradual rate hikes over the next “year or two,” and the likelihood that the FOMC may have to raise the fed funds rate above the Fed estimate of the long-run neutral rate. The sell off to end last week’s trading continued through this morning, lifting the 10-yr Treasury yield above the elusive 3.00% mark.

This week may well represent two notable developments in US negotiations as an emerging soft deadline of Thursday for Canada’s inclusion in NAFTA 2.0 intersects with the increasingly likely announcement of new measures on $200 billion worth of Chinese imports. In economic news, we have the New York Fed’s manufacturing survey today, followed by the NAHB housing index on Tuesday (both for September). On Wednesday, we will receive housing starts and permits for August and the current account balance for Q2. The Philadelphia Fed’s manufacturing survey for September is released on Thursday, along with existing home sales and the Conference Board’s leading index (both for August). The week closes with the release of the flash PMI reports for September. In the bond market the US Treasury will auction 10-year TIPS on Thursday.

Economic Calendar for the week of 09/17/2018 to 09/21/2018:

Monday: Empire Manufacturing
Tuesday: NAHB Housing Market Index
Wednesday: MBA Mortgage Applications, Housing Starts, Building Permits
Thursday: Philadelphia Fed’s Manufacturing Survey, Existing Home Sales, Initial Jobless Claims, Continuing Claims, Conference Board’s Leading Index
Friday: Markit PMI

*No Fed speakers this week as it is Black Out Week ahead next Wednesday’s rate decision

Please Note: The above Market Commentary information is updated weekly.