Monday | December 15, 2014
- The U.S. Treasury Department's sale of $59 bln in notes and bonds last week attracted the most demand since June as inflation expectations tumbled and investors sought a refuge amid sagging global growth. The bid-to-cover ratio, which gauges demand by comparing total bids with the amount offered, was 3.04 for the offerings of 3-, 10-, and 30-year securities -- the highest level on the series in six months.
- Federal Reserve officials will discuss their pledge to hold interest rates low for a "considerable time" as they meet this week. The phrase, retained at the FOMC's October meeting when it ended a two-year bond buying campaign, has been an important tool for the Fed to provide additional economic stimulus after it has held rates near zero since December 2008.
- The Thomson Reuters/University of Michigan December index of consumer sentiment increased to 93.8, the highest since Jan. 2007, from 88.8 last month. Six months of falling gasoline prices are providing individuals with more disposable income as merchants prepare for their busiest time of the year. Sustained hiring combined with faster wage growth is providing the impetus for continued retail sales gains that will underpin the economy as the year draws to a close.
- On Wednesday, the FOMC will announce its Fed Funds Target Rate which currently is set in the range 0.00% - 0.25%. The market will closely follow the release of the dot plot that shows each voting member's projected path of Fed Funds.
- This week's economic data features Nov. Housing Starts and CPI. Market participants expect Housing Starts increased to 1040k from an October showing of 1009k. Although growth in single family units is expected to remain slow, multifamily units are on the rise as rents continue to increase. CPI MoM is expected to be -0.1% for Nov. which is down from the previous print of 0.0%. CPI continues to be central to the Fed's data monitoring initiative as it weighs the decision to raise interest rates.
The information represented herein was obtained from various sources, which we believe to be reliable. Neither the information presented nor opinions expressed constitutes an offer to buy or sell any security. And it is not intended to guide the investor on which securities to buy, or when to buy or sell.