The PCE data on Friday will dominate market news

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Published Date 4/22/2024

The 10 year note at 8:30 am ET improved from overnight levels, at 8:30 am 4.64% +2 bps from Friday but down from 4.67% at 6 am.

The run to safety over the Israel/Iran conflict is slowing. Both countries breathing a little bit better and so too global markets. Last week the 10 year note, driver for rates, traded in a very narrow range from a high close at 4.65% to a low close at 4.59%.

Two keys for rates now, there is still tensions in the mid-east although not likely any peace will emerge, inflation increased earlier this month when March CPI and PPI were released, sending the 10 year note yield from 4.35% to 4.55% in just two days. Inflation still not understandable within the Fed although the two reports rattled Powell and most other Fed officials, now saying any rate cuts may have to wait until very late this year.

At 9:30 am the DJIA opened +167 after falling 211 last Friday, NASDAQ +102 after declining 320, S&P +24 from -43 last Friday. The 10 at 9:30 am 4.64% +2 bps. FNMA 6.0 30 year coupon at 9:30 -4 bps from Friday’s close and -1 bp from 9:30 am Friday.

Looking for a quiet session Monday, no data points. The keys this week, Treasury auctions over the next three days and PCE inflation on Friday. Short term technical indicators remain bearish. No Fed officials this week ahead of next week’s FOMC meeting.

This Week’s Economic Calendar:

Tuesday,

9:45 am April Flash PMI indexes (manufacturing 51.9, services 51.9)

10 am March new home sales (expected 670K from 662K in February)

1 PM $69B 2 year note auction

Wednesday,

7 am weekly MBA mortgage applications

8:30 am March durable goods orders (+2.3% from 1.3%, ex transportation orders +0.3% from +0.5%), core capital goods (+0.2% from +0.7%)

1 pm $70B 5 year note auction

Thursday,

8:30 am weekly jobless claims (215K from 212K last week)

Q1 advance GDP (+2.3% from +3.4% in Q4, personal consumption rate year/year +2.8% from +3.3%)

March advance US trade deficit (-$91.0B)

10 am March pending home sales (+1.0% from 1.6% in February)

1 pm $44B 7 year note auction

Friday

8:30 am March personal income (+0.5% from +0.3%, personal spending +0.6% from +0.8%)

March PCE inflation (month/month +0.3% unch from February, year/year +2.6% from 2.5%; core month/month +0.3% unch from February, year/year 2.7% from 2.8%)

10 am April University of Michigan consumer sentiment index (unch from mid-month 77.9)

Source: TBWS

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