US Economic Chartbooks
Please see our Economic Week Ahead Chartbook for a discussion of next week's economic releases provided in a visually friendly format that includes graphs, brief descriptions of SMR's forecasts, and links to detailed data previews. If you missed anything from last week, see our Economic Week in Review Chartbook for a look back at the releases with links to full analyses.
Fixed Income Focus: Treasuries Bull-Flatten ... Month-End Auction Outlook
he Treasury curve bull-flattened this past week. The front-end of the coupon curve did very little throughout the week, but the long-end rallied. As 10-year and 30-year yields fell by the most since the week ended April 14th, the 2-year/10-year and 2-year/30-year spreads staged the strongest single week flattening moves since the week ended July 8, 2016.
Treasury will hold the month-end cycle of 2-year, 5-year, and 7-year Treasury note auctions during the week ahead. We expect foreign demand will be supportive, but more so for the 2-year auction than the 5-year and 7-year auctions
Fixed Income Focus
No End to the Housing Inventory Squeeze in Sight
Chronically tight inventories of existing homes for sale are making home-buying, including trade-up buying, less affordable. While the construction of new homes may ease some of the pressures, we don't expect many of the other factors limiting for-sale inventory to reverse any time soon. This will limit the upside to residential investment's contribution to GDP growth.
Research Briefing - Yellen a bit more cautious on inflation outlook
FOMC Chair Yellen's semi-annual monetary policy testimony overall was in line with our expectation. Importantly she revealed a bit more caution on the inflation outlook than she conveyed at the June FOMC meeting and the FOMC detailed in the Monetary Policy Report released last Friday. This lends support to our call that the FOMC will forgo additional rate hikes this.
June Employment Analysis
(1) June Payrolls rose 222,000, somewhat stronger than expected
(2) April/May Payrolls revised higher by 47,000
(3) Unemployment Rate inched up to 4.4% from 4.3% in May
(4) Earnings/Hours/Aggregate Payrolls solid
(5) Overall tone of June data upbeat