Monday | May 13, 2013
Treasury yields slowly increased throughout the week and finished higher across all maturities. Since May 1st, the yield on the 10-yr note has risen to 1.90% from an intraday low of 1.61%. On the week, the 5- and 10-yr Treasuries yields finished higher by 10.4 and 16.0 bps, respectively.
Positive Eurozone data included German factory orders and industrial production, both surprising to the upside, indicating that Europe's largest economy is still strong. Market participants remained focused on news out of Japan. The yen continued to weaken, breaking through the 100 USD/JPY level for the first time since early 2009.
Economic news was light last week, highlighted by slightly improved jobs data. Initial Jobless Claims decreased by 4K to 323K, beating expectations. The report represents the lowest data point since January 2008, reinforcing April's positive employment report.
Numerous Fed Presidents were on the speaking circuit last week:
- Philadelphia President Plosser stated on Thursday that the Fed should slow its asset purchase program at the June FOMC Meeting. He expects the US economy will expand at a rate of 3% for the next two years while unemployment will decline to the FOMC's 6.5% threshold by the end of 2014.
- On Friday, Chairman Bernanke and Kansas City President George were both on the tape. While Bernanke shied away from commenting on FOMC policy, George opined that the continued expansion of the Fed's balance sheet could lead to "complications".
Economic data this week will include Advance Retail Sales, PPI, CPI, Housing Starts, and U. of Michigan Confidence, and Fed officials on the speaking calendar include: Plosser, Rosengren, Fisher, Williams, and Kocherlakota.
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.