Today’s Market Update

Fed Taper on Horizon and Inflation Remains Hot Topic
2021-10-18

This morning equity markets edged higher and Treasury yields were up with the 10-year yield moving near 1.60%.  The Fed’s more hawkish outlook since their latest meeting has sent Treasury yields significantly higher in the intermediate and longer parts of the curve.  And in its latest minutes, the Fed has communicated that it will begin to taper as soon as November.  The hot topics across markets remain the accelerating COVID cases and how sticky the current inflation trend will be.  So far in US over 57% US adults have received at least one dose of a COVID-19 vaccine and all American adults are eligible to receive a vaccine.  To date, the US has recorded over 44.9 million coronavirus cases and more than 724,000 deaths according to data from John Hopkins.

-CMS Staff

Treasury Yields

Term  Current  Last Month
3 Month0.04%0.03%
6 Month0.05%0.04%
2 Year0.41%0.22%
5 Year1.16%0.86%
10 Year1.59%1.36%
30 Year2.03%1.90%
Yields updated each morning.
Source: Bloomberg

Benchmarks

PRIME3.25%
DJIA35,290.02
Crude Oil (WTI)$82.58
YEN114.2500
Gold$1,768.00
1 Year CMT0.10%
1 Month LIBOR0.0804%
Fed Funds Effective0.07%
Next FOMC MeetingNov 2-3rd, 2021
Source: Bloomberg

Economic Indicator Calendar

DateEventPeriodSurv (M)ActualPriorRevised
10/18Capacity Utilization RateSep76.5%75.2%76.4%76.2%
Industrial Production YoYSep4.60%5.64%5.66%
Industrial Production MoMSep0.2%-1.3%0.4%-0.1%
Manufacturing Production MoMSep0.1%-0.7%0.2%-0.4%
NAHB Housing Market IndexOct768076
Total Net TIC FlowsAug$126.00b
Net Long-Term TIC FlowsAug$2.0b
10/19Building Permits MoMSep-2.4%5.6%
Building PermitsSep1.680m1.721m
Housing Starts MoMSep0.0%3.9%
Housing StartsSep1.620m1.615m
10/20MBA Mortgage ApplicationsOct 130.2%
10/21Initial Jobless ClaimsOct 14300k293k
Continuing ClaimsOct 72,550k2,593k
Philadelphia Fed Manufacturing IndexOct25.030.7
Philly Fed Business ConditionsOct20.0
Philly Fed CAPEX IndexOct23.60
Philly Fed EmploymentOct26.3
Philly Fed New OrdersOct15.9
Philly Fed Prices PaidOct67.30
Existing Home Sales MoMSep3.6%-2.0%
Existing Home SalesSep6.09m5.88m
US Leading Index MoMSep0.4%8.3%
10/22Manufacturing PMIOct60.360.7
Markit Composite PMIOct55.0
Services PMIOct55.154.9
Source: Bloomberg