Initial Jobless Claims fell to 289K vs. 294K prior (consensus 295K), the lowest level in two months, pushing the 4-week average to 2987K vs. 2995K prior. Continuing Claims fell to 2373K vs. 2514K prior (consensus 2436K). The Markit PMI Services Index in November reported a 5th straight month of slowing growth, at 56.2 vs. 56.3 at mid-month and 57.1 in October (final) and for December expectations are for an edge up to 56.3. The Leading Index rose +0.9% in October and are expected to rise another +0.5% for November. The FOMC released their statement yesterday and maintained the “considerable time” language and added that the Fed pledges to be “patient” on interest rate increases. The Fed is consistent in their assessment of the improving economy and expects continued Inflation growth and reduction in unemployment. Treasuries declined yesterday in response to the FOMC and today are continuing the decline and pushing 10-Year notes further from resistance. The curve has bear steepened with 2s10s up +3.4 bps and MBS is outperformingtreasuryhedges by 2-3 ticks.
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