Today’s Market Update:
Housing starts were up 9.7% month-over-month in January to a seasonally adjusted annual rate (SAAR) of 1.326m well ahead of the Bloomberg consensus of 1.234m while building permits jumped 7.4% to a SAAR of 1.396m also beating the consensus of 1.300m. The increase in starts was helped by 3.7% increase in single-family units, which totaled 877k. Building permits were driven primarily by permits for multi-unit dwellings; single-family permits dropped 1.7% to 866k. The key takeaway from the report is that it points to more supply coming to a housing market in desperate need of single-family homes.
The Import and Export Price Indexes for January both showed rising prices. Import prices increased 1.0% the most since May 2016. Excluding Fuel, import prices rose 0.5%, which was the largest monthly increase since March 2012. Export prices jumped 0.8%, beating the Bloomberg consensus forecast of 0.3%. The overall report should feed budding inflation concerns.
Despite the economic data yields overall are lower. Two-year Notes are up 0.1 basis points at 2.185%, five-year Notes are down 3.0 basis points at 2.621%, and the benchmark 10-Year Bond is down 4.5 basis points at 2.864%.
|1 Year CMT||1.99%|
|1 Month LIBOR||1.58813%|
|Fed Funds Effective||1.42%|
|Next FOMC Meeting||March 21, 2018|
Economic Indicator Calendar
|2/21/2018||MBA Mortgage Applications||16-Feb||N/A||-4.10%|
|Markit US Manufacturing PMI||Feb P||55.5||55.5|
|Markit US Services PMI||Feb P||54.0||53.3|
|Markit US Composite PMI||Feb P||N/A||53.8|
|Existing Home Sales||Jan||5.62m||5.57m|
|Existing Home Sales MoM||Jan||0.90%||-3.60%|
|2/22/2018||Initial Jobless Claims||17-Feb||230k||230k|
|Bloomberg Economic Expectations||Feb||N/A||52.5|
|Bloomberg Consumer Comfort||18-Feb||N/A||57|
|Kansas City Fed Manf. Activity||Feb||18||16|