|10-Year: -7/32....%.... GNMAs: .... USD/JPY: 112.05.... EUR/USD: 1.1660|
-- August Retail Sales (actual 0.1%; Briefing.com consensus 0.4%; prior 0.7%), Retail Sales ex-auto (actual 0.3%; Briefing.com consensus 0.5%; prior 0.9%), August Import Prices ex-oil (actual -0.1%; prior -0.3%), and Export Prices ex-agriculture (actual -0.2%; prior 0.0%)
-- August Industrial Production (actual 0.4%; Briefing.com consensus 0.4%; prior 0.4%) and Capacity Utilization (actual 78.1%; Briefing.com consensus 78.3%; prior 78.1%)
-- July Business Inventories (actual 0.6%; Briefing.com consensus 0.6%; prior 0.1%) and Preliminary September Michigan Sentiment Index (actual 100.8; Briefing.com consensus 97.0; prior 96.2)
- The preliminary University of Michigan Consumer Sentiment Index hit 100.8 in September (Briefing.com consensus 97.0), which was the second-highest level since 2004. The final reading for August was 96.2.
- The key takeaway from the report is that the pickup in sentiment was widespread across all major socioeconomic groups, which is a good underpinning for solid consumer spending activity.
- The Index of Consumer Expectations rose to 91.1 from 87.1 in August, hitting its highest level since July 2004.
- The Current Economic Conditions Index increased to 116.1 from 110.3.
- Total business inventories increased 0.6% in July, as expected, after increasing 0.1% in June. Total business sales increased 0.2% after increasing 0.3% in June.
- The key takeaway from the report is that business sales continued to outpace inventory growth year-over-year, which is a favorable trend that carries the potential to lead to a better pricing environment for businesses.
- Manufacturers' and wholesalers' inventories were known ahead of time, so the missing variable was the report on retailers' inventories, which increased 0.5% after declining 0.1% in June.
- Retailers' inventories were propped up by a 1.2% increase in motor vehicle inventories and a 1.2% increase in furniture, home furnishings, and electronic and appliance store inventories.
- On a year-over-year basis, total business inventories were up 4.3% while total business sales were up 8.1%.
- The inventories-to-sales ratio increased to 1.34 from 1.33 in June and was down from 1.39 in the same period a year ago.
- Yield check:
- 2-yr: +3 bps to 2.78%
- 5-yr: +3 bps to 2.90%
- 10-yr: +3 bps to 3.00%
- 30-yr: +4 bps to 3.14%