Daily
Market Color
8/24/2012
Yesterday’s Economic Reports
·
Jobless
claims came in higher than expected @ 372k Vs. 365k Est
o
The
downside surprise gave treasury prices a boost because the negative data is
being perceived as one reason, among many, for the FED to provide stimulus on
9/12/12
·
New
home sales were up 3.6% in July beating consensus coming in @ 372k Vs. 362k,
with most of the gains concentrated in the Northeast and Midwest.
o
This
is a two year high in new home sales
Today’s Economic Reports
·
Today
at 8:30am, we had July’s Durable Goods Orders numbers coming in at 4.2% Vs.
estimates of 1.9%, however, orders drop 40bps if you exclude transportation
orders
o
Treasuries
rallied on the report, because market players believe this will increase the
probability of QE3
·
We
also had second quarter GDP data that came out from the UK today, the report
was in line with consensus; UK’s economy dropped 50bps, as a result the Pound
is drifting lower
Headlines
·
The
news was relatively light yesterday. Merkel and Hollande are in talks to find
common ground in handling Greece debt woes along with the debt burdens of other
peripheral Euro Zone members, according to Bloomberg
o
The
request for additional time from Greek Prime Minister, Antonis Samaras, may go
unanswered until the troika’s assessment of Greece’s finances
o
According
to the IMF, Greece will need up to $14bn regardless of Greece receiving an
extension to meet their bailout covenants
Trades
·
I’ll
continue to be long treasuries going into next Friday; next week should prove
to be eventful because of the following:
o
We
have two FOMC members speaking on Monday
o
US
GDP data will be released on Wednesday
o
And
on Thursday we have Jobless Claims and Personal Income and Outlays
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