Morning Market Update: August 17, 2018

Treasurys Remain Stable as Equities Increase

Commentary for Thursday: Treasurys were little changed while equities increased. Yields were initially higher in choppy overnight trading but trended lower ahead of economic data. They dropped to their lowest levels following the release of mixed economic data that reported an improvement in jobless claims but a decline in housing starts. Yields shifted higher the remainder of the morning before trending lower throughout the afternoon and ended with the curve flatter. 

This Morning: Yields are little changed with no economic data releases to direct market activity. 

Initial jobless claims fell by 2K week-over-week to 212K while the prior week was upwardly revised by 1K from 213K to 214K. Despite the decrease, the 4-week moving average increased by 1K to 215.5K. Likewise, continuing claims decreased by 39K to 1,721K following an upward revision of 5K to 1,760K the week prior. As a result, the 4-week moving average fell by 8K to 1,738.5K, the lowest level in five weeks. The insured unemployment rate held steady at 1.2%.

The Philadelphia Fed Business Outlook fell by a more-than-expected 13.8 points from 25.7 to 11.9 in August, its lowest reading in 21 months. Over 50% of firms surveyed expect increases in activity in the next six months while only 12% expect declines. 

Housing starts rose by a less-than-expected 0.9% to an annual rate of 1.168M in July. The moderate increase was mostly driven by multi-family units which rose 3.1% month-over-month but are still down 9.6% from one year ago. Single-family units increased 0.9% month-over-month or 2.7% from one year ago. Regional data was mixed as the West fell the most, declining 19.6% from the prior month, and the Northeast fell 4.0%. On the other hand, the South increased 10.4%, and the Midwest rose 11.6%.

Financial Markets Research

08162018 

The morning market update is provided by: 

solutionsheadshots_hotchkiss_smJames Hotchkiss
Director, Member Strategy and Solutions








SolutionsHeadshots_Deven_smMelissa Deven
Director, Member Strategy and Solutions





Disclaimer

The data and valuations provided in this document are for information purposes only and are provided as an accommodation and without charge. The Federal Home Loan Bank of Chicago makes no representations or warranties about the accuracy or suitability of any information in this document. This document is not intended to constitute legal, investment, or financial advice or the rendering of legal, consulting, or other professional services of any kind.

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