|10-Year: -12/32....%.... GNMAs: .... USD/JPY: 109.75.... EUR/USD: 1.1185|
-- Treasuries pull back with shorter tenors leading the way
-- 8:30 ET: Weekly Initial Claims (actual 212,000; Briefing.com consensus 222,000; prior 228,000), Continuing Claims (actual 1.660 mln; prior 1.688 mln), April Housing Starts (actual 1.235 mln; Briefing.com consensus 1.200 mln; prior 1.168 mln), Building Permits (actual 1.296 mln; Briefing.com consensus 1.280 mln; prior 1.288 mln), and May Philadelphia Fed Survey (actual 16.6; Briefing.com consensus 7.5; prior 8.5)
- Housing starts increased 5.7% m/m in April to a seasonally adjusted annual rate of 1.235 million (Briefing.com consensus 1.200 mln), led by a 6.2% increase in single-unit starts. Building permits rose 0.6% m/m to 1.296 million (Briefing.com consensus 1.280 mln), although permits for single-unit dwellings declined 4.2%.
- The key takeaway from the report, however, is that there hasn't been any acceleration in building activity. Total housing starts are down 2.5% yr/yr and single-unit starts are down 4.3% yr/yr.
- Initial claims for the week ending May 11 decreased by 16,000 to 212,000 (Briefing.com consensus 222,000). Continuing claims for the week ending May 4 decreased by 28,000 to 1.66 million.
- The key takeaway from the report is that the initial claims level remains consistent with a tight labor market that is expected to translate into another month of solid nonfarm payrolls growth.
- The Philadelphia Fed Index for May jumped to 16.6 (Briefing.com consensus 7.5) from 8.5 in April. The dividing line between expansion and contraction is 0.0.
- The key takeaway from the report is that firms were more optimistic about hiring plans over the next six months, which suggests they expect end demand to remain solid.
- Yield check:
- 2-yr: +4 bps to 2.20%
- 3-yr: +3 bps to 2.15%
- 5-yr: +3 bps to 2.18%
- 10-yr: +2 bps to 2.40%
- 30-yr: +1 bp to 2.83%