Treasuries are higher across the curve this morning from yesterday’s close. The UST10-Year yield is currently at 2.954% after closing at 2.967% prior.
Yesterday the Fedsannounced the second rate hike of the year as expected, while providing a more hawkish tone for the outlook of future policy changes. The Fed dots shifted slightly higher to reflect an expectation of four total rate hikes for 2018, up from three rate hikes as previously projected. Fed Chairman Powell reiterated that the economy is in great shape, and noted that the recent inflation data have been encouraging. This morning the ECB kept their current interest rates unchanged as expected, but President Mario Draghi announced the ECB’s decision to end its bond-buying program by the end of this year.
The May Retail Sales Advance rose 0.80% month-over-month following an upwardly revised 0.40% increase in April. Retail Sales excluding Auto rose above expectations at 0.90% month-over-month versus a 0.50% increase per consensus following an upwardly revised 0.40% increase prior. Moreover, Retail Sales excluding Auto and Gas rose 0.80% month-over-month after showing a 0.30% increase in April. The May Import Price Index reported slightly higher than expected at 0.60% increase versus a 0.50% increase per consensus, bringing its year-over-year index up to 4.30% from an upwardly revised 3.60% prior. Export Price Index also rose above expectations at 0.60% versus a 0.30% increase per consensus, bringing its year-over-year index up to 4.90% from a downwardly revised 3.70%.
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Yesterday the Feds announced the second rate hike of the year as expected, while providing a more hawkish tone for the outlook of future policy changes. The Fed dots shifted slightly higher to reflect an expectation of four total rate hikes for 2018, up from three rate hikes as previously projected. Fed Chairman Powell reiterated that the economy is in great shape, and noted that the recent inflation data have been encouraging. This morning the ECB kept their current interest rates unchanged as expected, but President Mario Draghi announced the ECB’s decision to end its bond-buying program by the end of this year.
The May Retail Sales Advance rose 0.80% month-over-month following an upwardly revised 0.40% increase in April. Retail Sales excluding Auto rose above expectations at 0.90% month-over-month versus a 0.50% increase per consensus following an upwardly revised 0.40% increase prior. Moreover, Retail Sales excluding Auto and Gas rose 0.80% month-over-month after showing a 0.30% increase in April. The May Import Price Index reported slightly higher than expected at 0.60% increase versus a 0.50% increase per consensus, bringing its year-over-year index up to 4.30% from an upwardly revised 3.60% prior. Export Price Index also rose above expectations at 0.60% versus a 0.30% increase per consensus, bringing its year-over-year index up to 4.90% from a downwardly revised 3.70%.
The curve has bull-flattened with the UST 10-Year yield down 1.3 bps from prior closing.