|10-Year: -7/32....%.... GNMAs: .... USD/JPY: 113.58.... EUR/USD: 1.1353|
--President Trump and President Xi agree to suspend further tariff actions for 90 days to allow more time for trade negotiations
--Market recoups early losses; 10-yr yield back below 3.00%
--November ISM Manufacturing Index: Actual 59.3, Briefing.com consensus 57.2, Prior 57.7
--October Construction Spending: Actual -0.1%, Briefing.com consensus +0.3%, Prior revised to -0.1% from 0.0%
- Total construction spending declined 0.1% in October (Briefing.com consensus +0.3%) following a downwardly revised 0.1% decline (from 0.0%) in September.
- The key takeaway from the report is that the weakness was driven by a decline in new single-family construction, providing further evidence of the softening in housing market activity.
- Total private construction spending declined 0.4% in October. Residential spending fell 0.5%, led by a 0.5% drop in new single-family construction. Nonresidential spending declined 0.3%, led by a 2.4% drop in power spending.
- Total public construction spending increased 0.8%. Nonresidential spending jumped 0.7%, driven by a 2.6% increase in educational spending.
- Total construction spending was up 4.9% year-over-year in October, with total residential spending up 1.7% and total nonresidential spending up 7.3%.
- The ISM Manufacturing Index for November checked in at 59.3% (Briefing.com consensus 57.2%) versus 57.7% for October, led by strength in the New Orders Index.
- The key takeaway from the report is that it reflects an acceleration in national manufacturing activity at a time when concerns have been picking up about a general growth slowdown. Accordingly, it can help mitigate some of the slowdown concerns and potentially foster an improved outlook for Q4 GDP growth.
- The New orders Index increased to 62.1% from 57.4%. That is the highest reading since August 2018 and reverses two straight months of decelerating activity.
- The Prices Index dropped to 60.7% from 71.6%, which was the lowest month of price expansion since June 2017.
- The Production Index edged up to 60.6% from 59.9%.
- The Employment Index increased to 58.4% from 56.8%.
- According to the ISM, the past relationship between the PMI and overall economy indicates the November reading corresponds to a 4.9% increase in real GDP on an annualized basis.
- Yield check:
- 2-yr: +2 bps to 2.83%
- 5-yr: +2 bps to 2.86%
- 10-yr: +1 bp to 3.02%
- 30-yr: UNCH at 3.31%