Clarksville, TN – The economic data calendar was thin and reports were of little consequence for the markets. As expected, the European Central Bank left short-term interest rates unchanged and did not alter its asset purchase plans.
ECB President Draghi indicated that policymakers were encouraged by the financial stability following the initial reaction to the Brexit vote. He also said that more information will become available over time and the ECB would act using all possible tools “if needed.”Building permits rose as expected, reflecting continued strength in single-family activity in recent months, but with some pullback in multi-family activity (following unusual strength last year). Existing home sales were a little stronger than anticipated in June, despite evidence of some supply constraints.
Next week, the economic calendar begins to heat up again. The Consumer Confidence Index and durable goods orders have some market-moving potential, but there are more important items on the calendar.
The Federal Open Market Committee is widely expected to leave short-term interest rates unchanged. There is no Yellen press conference or revised Fed projections, so investors will look to the policy statement for clues about the likelihood of a rate hike in September or December.
Real GDP growth is expected to have picked up sharply in the second quarter (following a soft 1Q16), but annual benchmark revisions will add to the uncertainty (and we may see the estimate of 2015 growth revised lower).
The Employment Cost Index may not get much attention from the markets (it arrives at the same time as GDP), but Fed officials see the report as an important gauge of inflation pressure (the year-over-year pace is expected to accelerate).
|Last||Last Week||YTD return %|
Consumer Money Rates
|Last||1 year ago|
|Last||1 year ago|
|Dollars per British Pound||1.323||1.561|
|Dollars per Euro||1.103||1.093|
|Japanese Yen per Dollar||105.82||123.97|
|Canadian Dollars per Dollar||1.309||1.303|
|Mexican Peso per Dollar||18.577||16.103|
|Last||1 year ago|
|Last||1 month ago|
|10-year municipal (TEY)||2.26||2.35|
Treasury Yield Curve – 07/22/2016
As of close of business 07/21/2016
|July 26||—||New Home Sales (June)
Consumer Confidence (July)
|July 27||—||Durable Goods Orders (June)
Pending Home Sales Index (June)
FOMC Policy Decision (no press conference)
|July 28||—||Jobless Claims (week ending July 23)
Advance Economic Indicators (June)
|July 29||—||Employment Cost Index (2Q16)
Real GDP (2Q16 + annual benchmark revisions)
Chicago Purchasing Managers Index (July)
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Tax Equiv Muni yields (TEY) assume a 35% tax rate on triple-A rated, tax-exempt insured revenue bonds.
The information contained herein has been obtained from sources considered reliable, but we do not guarantee that the foregoing material is accurate or complete. Data source: Bloomberg, as of close of business July 21st, 2016.