Morning Market Update: January 18, 2019

Treasury Yields Shifted Higher as Initial Jobless Claims Declined

Commentary for Thursday: Treasurys sold off as equities increased on the day. Yields were initially lower in quiet overnight trading. They jumped following the release of economic data that unexpectedly reported a decline in initial jobless claims, which was in focus amid the partial U.S. government shutdown. Yields were little changed the remainder of the morning but jumped again mid-afternoon on news the U.S. is considering lifting China trade tariffs. Yields stabilized before close with the curve flatter.

This Morning: Treasury yields are shifting higher ahead of economic data to be released on Industrial Production.

Initial jobless claims decreased by 3K to 213K in the week ending January 12. The previous week was not revised and remained at 216K. As a result, the 4-week moving average decreased slightly by 1K to 220.75K. On the other hand, continuing claims increased by 18K to 1.737M in the week ending January 5. The prior week was downwardly revised by 3K to 1.719M. As a result, the four-week moving average rose by 8K to 1.728M. The insured unemployment rate remained unchanged at 1.2%.
The Chicago Fed Survey of Business Conditions Activity Index decreased slightly from -2 to -4 in late November through December. Economic activity remained at a modest pace as current hiring slowed, expectations to hire in the next six to 12 months decreased, and demand for respondents' firms declined. Respondents' outlooks for the U.S. economy deteriorated considerably, falling to -18 from six the month prior.

Financial Markets Research

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


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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