10-Year Treasury Yield
U.S. Treasury yields were little changed on Tuesday, as investors continued to assess the outlook for the U.S. economy and digested the latest round of corporate earnings. As of around 5:25 a.m. ET, the yield on the benchmark 10-year Treasury note was fractionally higher at 3.5966% while the yield on the 30-year Treasury bond also nudged up by around 1 basis point to 3.8152%. Yields move inversely to prices.
Empire State Manufacturing Index The dollar rose on Monday after New York state factory activity in April increased for the first time in five months, helping bolster expectations the Federal Reserve will raise interest rates in May. Fed funds futures also showed that expectations the Fed will start cutting rates later this year were pushed back to November from September, with a smaller cut now anticipated. The NY Empire State Manufacturing Index unexpectedly jumped to 10.8 in April of 2023 from -24.6 in March, beating market forecasts of -18. The reading pointed to the first increase in manufacturing in the NY state in five months and the strongest since July last year. The new orders index rebounded to a one-year high of 25.1 from -21.7, price pressures eased (33 vs 41.9) and employment shrank less, although it marked the third consecutive month of falls (-8 vs -10.1). Looking ahead, firms expect business conditions to improve over the next six months (6.6 vs 2.9), with measures of capital expenditures and employment also rising
HMI
Homebuilder sentiment rises in April, as builders grab near-record share of the market. The National Association of Home Builders/Wells Fargo Housing Market Index registered a 1-point gain in April to 45. Anything under 50 is considered negative. Builders said just under one-third of housing inventory is new construction, compared with historical norms of around 10%. A lack of listings on the resale market is giving builders an edge.
Treasury International Capital (TIC)
The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for February 2023. The next release, which will report on data for March 2023, is scheduled for May 15, 2023. The sum total in February of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a net TIC inflow of $28.0 billion. Of this, net foreign private outflows were $37.4 billion, and net foreign official inflows were $65.5 billion. Foreign residents increased their holdings of long-term U.S. securities in February; net purchases were $63.6 billion. Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $71.0 billion. After including adjustments, such as estimated foreign portfolio acquisitions of U.S. stocks through stock swaps, overall net foreign purchases of long-term securities are estimated to have been $72.2 billion in February.
China
China’s economy grew 4.5% in the first quarter, the fastest pace in a year. China’s growth has been under the spotlight as it reopens after ending most of its strict Covid restrictions that were in place for nearly three years. GDP grew by 4.5% in the first quarter, China’s National Bureau of Statistics said Tuesday. That was higher than the 4% forecast in a Reuters poll of economists and marks the highest growth since the first quarter of last year. Quarter-on-quarter, the economy grew 2.2%.
Housing Starts
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Beige Book
Overall economic activity was little changed in recent weeks. Nine Districts reported either no change or only a slight change in activity this period while three indicated modest growth. Expectations for future growth were mostly unchanged as well. Employment growth moderated somewhat this period as several Districts reported a slower pace of growth than in recent Beige Book reports. Overall price levels rose moderately during this reporting period, though the rate of price increases appeared to be slowing.
Jobless Claims
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Philly
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PMI Composite Flash
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