Treasury prices are slightly lower today as investors react to a worse than expected Jobless Claims report and prepare for the balance of today’s economic releases. The 2-year note has dropped 1/32 to yield 0.62% while the 5-year note is trading 2/32 lower, yielding 1.79%. The benchmark 10-year note has declined 1/32 thus far to yield 2.94% while the long bond is trading 3/32 higher to yield 3.88%. The economic calendar presents a colorful picture today starting with the Department of Labor’s release of its weekly Jobless Claims report. The report showed an unexpected increase in the number of people filing for unemployment insurance along with the number of people already in this program. The weekly Initial Jobless Claims report showed a 13,000 increase from the previous period to reach 472,000. Analysts’ expected a 455,000 reading for the week. The Continuing Claims report also showed a higher than expected reading at 4.616 million. Furthermore, the revised number for the previous week showed a 25,000 increase to 4.573 million. Meanwhile, the 4-week moving average number of Initial Claims rose to 466,500, an increase of only 3,250 from the previous period. This weaker than expected Jobless Claims report will set the tone for tomorrow’s release of June’s change in Nonfarm Payrolls, expected at -125K for June as well as the unemployment rate which analysts expect will increase 0.10% to 9.80%.
Additionally, Pending Home Sales will be released at 9:00 am CDT. Pending Home Sales, which tracks the number of home resales under contract, is expected to decrease 14.20% for the Month. This index is often used as a gauge to predict future home sales activity as these sales typically become existing home sales one or two months later. Also, the Institute for Supply Management (ISM) will also release its report on business activity in the manufacturing sector for June. The pace of growth is expected to show a slight decrease of 0.70 (compared to the previous period) to 59.00. Investors pay attention to this timely report in which a reading below 50 denotes economic contraction. Finally, Construction Spending is also scheduled to be released later today. This report, which tracks residential, non-residential and public expenditures on new construction, is expected to turn negative on a month-over-month basis by 0.80% for May after registering a 2.70% for the previous period.
Additionally, Pending Home Sales will be released at 9:00 am CDT. Pending Home Sales, which tracks the number of home resales under contract, is expected to decrease 14.20% for the Month. This index is often used as a gauge to predict future home sales activity as these sales typically become existing home sales one or two months later. Also, the Institute for Supply Management (ISM) will also release its report on business activity in the manufacturing sector for June. The pace of growth is expected to show a slight decrease of 0.70 (compared to the previous period) to 59.00. Investors pay attention to this timely report in which a reading below 50 denotes economic contraction. Finally, Construction Spending is also scheduled to be released later today. This report, which tracks residential, non-residential and public expenditures on new construction, is expected to turn negative on a month-over-month basis by 0.80% for May after registering a 2.70% for the previous period.
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