Market Insights - January 22, 2019

January 22, 2019 Chatham Financial

Data Dependent

View this week's rates.

Prior Week Summary

Despite ongoing worries of a global economic slowdown and the continued U.S. government shutdown, U.S. equity markets rose for the fourth straight week, largely buoyed by a perceived breakthrough in U.S.-China trade negotiations, solid production data and continued calls for patience from Fed officials. Market participants began the week digesting Chinese trade data that saw exports and imports drop 4.4% and 7.6% respectively, but ended the week energized by reports that Beijing offered to import over $1 trillion worth of U.S. goods over the next six years during trade negotiations last week. Additionally, in an attempt to combat slowing economic growth at home, China injected 560 billion yuan into the market Wednesday, easing investor worries about China’s worsening economic outlook.

The Empire manufacturing survey fell far below analyst expectations on Monday but was countered late in the week by a much better-than-expected reading from the Philadelphia Fed’s Business Outlook survey. The survey suggested that the manufacturing sector decline may have been overstated. Lastly, a number of Federal Reserve officials, including the Esther George, emphasized the need to exercise patience in regards to monetary policy, reiterating similar sentiment offered last week by Federal Reserve Chairman Jerome Powell.

The Look Forward

On the holiday-shortened week, market participants are awaiting data on existing home sales, new home sales, durable goods orders and retail sales.

 

Rates Snapshot

Sources: Bloomberg Finance L.P., (Treasuries) Chatham Financial (Swap Curves), FHLB Boston, Chicago, Dallas, Des Moines for FHLB Advance Rates. Wells Fargo Brokered CD Indications.

 

Market Implied Policy Path (Overnight Indexed Swap Rates)

Source: Chatham Financial

 

Fixed Income Snapshot

Source: Bloomberg Finance L.P.

 


Disclosures

Chatham Hedging Advisors, LLC (CHA) is a subsidiary of Chatham Financial Corp. and provides hedge advisory, accounting and execution services related to swap transactions in the United States. CHA is registered with the Commodity Futures Trading Commission (CFTC) as a commodity trading advisor and is a member of the National Futures Association (NFA); however, neither the CFTC nor the NFA have passed upon the merits of participating in any advisory services offered by CHA. For further information, please visit https://www.chathamfinancial.com/legal-notices/.

Transactions in over-the-counter derivatives (or “swaps”) have significant risks, including, but not limited to, substantial risk of loss. You should consult your own business, legal, tax and accounting advisers with respect to proposed swap transaction and you should refrain from entering into any swap transaction unless you have fully understood the terms and risks of the transaction, including the extent of your potential risk of loss. This material has been prepared by a sales or trading employee or agent of Chatham Hedging Advisors and could be deemed a solicitation for entering into a derivatives transaction. This material is not a research report prepared by Chatham Hedging Advisors. If you are not an experienced user of the derivatives markets, capable of making independent trading decisions, then you should not rely solely on this communication in making trading decisions. All rights reserved. 19-0031

Previous Article
Market Insights - January 28, 2019
Market Insights - January 28, 2019

President Donald Trump and members of Congress agreed to reopen the government on Friday, ending at least t...

Next Article
Market Insights - January 14, 2019
Market Insights - January 14, 2019

The equity markets moved broadly higher last week, largely on U.S.-China trade optimism, and dovish sentime...

×

Subscribe to Chatham's weekly Market Insights

First Name
Last Name
Company
!
Thank you!
Error - something went wrong!