Job openings in the U.S. surprised forecasters in April by rising 358,000 to reach 10.1 million in April 2023, surpassing market expectations of 9.375 million. The resilience is putting pressure on the Fed and fueling the higher rates for longer scenario. Job Openings and Labor Turnover survey (JOLTS) represented a rebound from the previous month’s near two-year low of 9.745 million. The most openings were in retail trade (209 thousand); health care and social assistance (185 thousand); transportation, warehousing, and … Continue reading “US Job Openings Unexpectantly Rise First Time in Four Months”
Texas Manufacturing Mood Worsens with Declining Orders and Outlook – Dallas Fed
The Dallas Fed manufacturing survey manufacturing index, a key measure of state manufacturing conditions, edged down to negative 29.1 in April from -23.4 prior to the lowest reading since July. The new orders index has now been in negative territory for a year and pushed down further from -9.6 to -16.1. The growth rate of orders index also fell, declining 10 points to -20.7, its lowest value since mid-2020. Perceptions of broader business conditions continued to worsen in May. The … Continue reading “Texas Manufacturing Mood Worsens with Declining Orders and Outlook – Dallas Fed”
US Home Prices Rise 0.5% in March, Western States Fall First Time in Ten Years – FHFA
The FHFA Housing Price Index rose seasonally adjusted 0.6% in March compared to the previous 0.7% increase in February and expectations of a 0.2% advance. House prices with mortgages guaranteed by Fannie Mae and Freddie Mac rose nationwide the FHFA House Price Index showed. Higher mortgage rates continue to put downward pressure on demand, weakening house price growth. For the nine census divisions, monthly house prices advanced the most in the East South-Central division (1.5 percent), while prices fell in … Continue reading “US Home Prices Rise 0.5% in March, Western States Fall First Time in Ten Years – FHFA”
Home Prices Rise with Shortage of Homes for Sale in March – S&P CoreLogic Case-Shiller
The S&P Case-Shiller National Home Price Index, which measures home prices across the US, rose 0.4% m/m in March 2023, on a year-over-year basis, the index rose 0.7% in March, down from a 2.1% annual rate the prior month. The annual increase was the smallest since May 2012. Miami had the fastest annual home-price growth in the country, at 7.7%, followed by Tampa, at 4.8%. The weakest market was Seattle, where prices fell 12.4% on an annual basis. The average … Continue reading “Home Prices Rise with Shortage of Homes for Sale in March – S&P CoreLogic Case-Shiller”
Central Bank Watch – Resilient Demand and Inflation Data Confusing Bankers and Analysts
The bond market is turning nervous as we continue to see bond and currency markets roiled by renewed debt ceiling theatrics and more data this week (PCE, GDP Price Index, Services PMI, Personal Income and Spending, Jobless Claims) pointing to resilient demand and inflation. The futures market is now pricing in a 69% probability of a 25-bps hike on June 14th, with peak Fed funds now at 5.33% for the July 26th meeting. Higher for longer is the pricing, the … Continue reading “Central Bank Watch – Resilient Demand and Inflation Data Confusing Bankers and Analysts”
Bond Traders Weekly Outlook: Two Year Rates Jump in U.S., U.K and E.U on Inflation Fears
U.S. Treasuries ended the week lower as yields on short-term government debt in the US, UK and eurozone have begun to rise again anticipating more prolonged rate increases to contend with price rises. Rate hike expectations continued growing with the fed funds futures market now showing a 66.5% implied likelihood of another 25-bps increase in June, up from 17.4% a week ago. In the U.K. two-year gilts had one of the biggest weekly falls in 20 years. The entire Treasury … Continue reading “Bond Traders Weekly Outlook: Two Year Rates Jump in U.S., U.K and E.U on Inflation Fears”
Sea Freight Indices Slide Continues; Capesize Sank 20%, BDI Off 15%, Supramax Down 12.3% Panamax Falls 8.4% – TC Shipping Monitor
The morose global economy has seen the Baltic Exchange’s dry bulk sea freight index continue to fall, now for a twelfth straight day on Friday, its lowest level since March 2nd. All major segments of the dry bulk spot lower as shipping continued to grapple with a China reopening sputtering at best. The BDI was down nearly 15%, its worst week in nearly four months. The Capesize 5TC sank 20%, with diminishing demand amid reduced production by Chinese steelmakers. The … Continue reading “Sea Freight Indices Slide Continues; Capesize Sank 20%, BDI Off 15%, Supramax Down 12.3% Panamax Falls 8.4% – TC Shipping Monitor”
US Durable Goods Report Much Stronger Business Spending in April
The US economy appears resolute in the face of onslaught of rising rates, pessimism and inflation hitting the American manufacturing sector. Durable goods orders showed an unexpected increase in headline orders while the March increase was revised even higher. More significantly that nondefense capital goods orders excluding aircraft, a proxy for business spending increased 1.4% month-over-month. Durable goods orders rose 1.1% month-over-month in April, much stronger than (consensus -1.0% and following an upwardly revised 3.3% increase (from 3.2%) in March. … Continue reading “US Durable Goods Report Much Stronger Business Spending in April”
Robust Increase in Real Spending with Core PCE Inflation at Persistently High Levels in April
The Fed’s preferred inflation gauge, core PCE Price Index, proved higher than consensus at persistently high levels in April. The markets recognized the report showed a combination of a robust 0.5% increase in real spending and the uptick in the year-over-year rates for the PCE Price Index and core-PCE Price Index. That combination will give the Fed some pause about pausing its rate hikes in June. The personal consumption expenditure price index (Core PCE prices) in the US, which exclude … Continue reading “Robust Increase in Real Spending with Core PCE Inflation at Persistently High Levels in April”
South Africa Raises Interest Rates 50bps, Rand Falls to All Time Low
The South African Reserve Bank (SARB) increased its benchmark repo interest rate by another 50 bps to 7.25% at its May 2023 meeting. Markets had expected a smaller 25 bps increase. Policymakers cited concerns regarding the significant depreciation of the rand and the mounting pressures of inflation as key drivers behind the rate adjustment. The SARB also revised its inflation forecasts, with inflation for 2023 now projected to average 6.2%, up from the previous estimate of 6.0%. The move triggered … Continue reading “South Africa Raises Interest Rates 50bps, Rand Falls to All Time Low”