Daily Market Color 08/21/2013

Daily Market Color

08/21/2013

Economic Reports & Headlines

The economic calendar today was filled with a hand full of reports that merit extra attention. We will start off in Great Britain. The latest CBI industrial trends survey, which measures manufacturing activity, was better than expected, 0 Vs -7.

On the domestic front, the National Association of Realtors' existing home sales report for July surpassed analysts’ estimates, 5.390m Vs 5.150m.

The FOMC minutes showed that most members are unwilling to begin tapering in light of subpar inflation and sluggish job growth. Some members expressed concern over the medium term risks that asset purchases may have on inflation.

HSBC’s Flash manufacturing Purchasing Managers Index for China, in August, expanded unexpectedly and came in at a four month high according to CNBC, 50.1 Vs 48.3.

Future Reports

Tomorrow we will get flash PMI reports from the US, France, Germany and the Eurozone.  

Weekly jobless claims will be issued at 8:30am.

 

Trades

The Federal Open Market Committee minutes were uneventful and seem to be in line with my train of thought. Only one FOMC member dissented from the committee’s stance because she wants to taper. I strongly feel that tapering will not occur in September’s meeting because there is only one month of reports left between now and September’s meeting. I highly doubt that reports on unemployment and inflation, between now and the middle of September, will garner enough support to make a motion to taper pass. In light of that, I really like 10 year treasury notes. These are a good short play at the moment. I would be cautious trading them around the jobs report.