Prior Week Summary
U.S. equities were little changed from a week prior, save for modest gains by the Dow Jones, amid mixed first-quarter corporate earnings and equally mixed global growth data. In U.S. economic news, retail sales topped analyst expectations along with the Empire Manufacturing Survey. In China, GDP, retail sales and industrial production figures all topped estimates. Reports on Wednesday suggested that China may look to keep the momentum going by implementing a stimulus plan centered on automobiles and electronics. Elsewhere, Germany cut its 2019 GDP forecast to 0.5% after forecasting a 2.1% 2019 GDP growth rate only one year ago.
A number of Fed officials spoke last week on monetary policy. Notably, Chicago Fed President Charles Evans said, “I can see the fund's rate being flat and unchanged into the fall of 2020. For me, that’s to help support the inflation outlook and make sure that it's sustainable at two or a little bit above.”
U.S. and Chinese officials will continue trade negotiations at the end of the month in Beijing. Reports surfaced mid-week suggesting that the two sides hope to have a finalized deal by early May, which would then set the stage for a possible Trump-Xi signing summit.
The Look Forward
Market participants will get updated numbers on existing and new home sales, durable goods orders and a consumer confidence measure, but all eyes will be on Friday’s first-quarter GDP release. Additionally, $41 billion of 5-year Treasury Notes, $32 billion of 7-year Treasury Notes and a host of other Treasuries head to auction this week.
Market Implied Policy Path (Overnight Indexed Swap Rates)
Fixed Income Snapshot
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