Daily Market Color 8/30/2012

Daily Market Color

8/30/2012

Today’s Economic Reports & Headlines

FED Reserve Bank President Dennis Lockhart said further easing will be a close call, via WSJ

So far for today we had economics reports that supported our treasury position, Jobless claims missed consensus coming in at 374k versus estimates of 370k

Personal Income and Outlays was in line with consensus, coming in at 30 and 40 basis points (bps) respectively

Overseas, Germany released employment figures that were in line with consensus; the jobless rate came in at 6.8%, 9,000 were laid off in August bringing the total number of the unemployed in Germany at 2.901 million. This is the second consecutive month that joblessness increased in Germany

The EC Economic Sentiment report, which are three indices that measures economic, industrial and consumer sentiment in the European Union, is at a 3 year low. Economic and industrial sentiment slightly missed expectations while consumer sentiment was in line with economists forecast    

Tomorrow’s Reports

The Jackson Hole conference will begin at 10:00am tomorrow; this symposium should prove to be eventful with market players anticipating dovish comments from Ben Bernanke

In addition to J-Hole in the US, numbers for Chicago PMI and Factory Orders will be released as well  

Italy and the European Monetary Union will release consumer pricing reports that measures inflation at 5:00am

Germany will be releasing retail sales numbers at 2:00am

China will be coming out with their manufacturing Purchasing Managers Index (PMI) report for August at 9:00pm; economists are expecting the index to come in just above 50.1, indicating a modest expansion for manufacturing in China (PMI readings above 50 represents an expansion while readings below 50 represents a contraction)

Trades

JACKSON HOLE, this is the event all market participants will be focusing on, I personally expect Ben Bernanke to state he is still monitoring economic conditions to assess the need for further stimulus, the only economic report that will be relevant to the FED’s monetary decisions before their policy announcement on September 13^th will be the Non-Farm Payrolls report.

Furthermore, the numbers that came out for the past week weren’t horrific, but they also weren’t optimistic as well. So, I will remain long treasuries heading into the conference and trade accordingly with the sentiment of those speculating in treasuries