Consumer Economy
Durable Goods, New Orders (DGORDER); DELAYED
Nonfarm Payrolls (PAYEMS); DELAYED
ISM Manufacturing Index; 49.1 (< 50 is contraction)
Consumer Confidence (conference-board); 94.2 (< 100 is contraction)
The two series we have values for are hinting at contraction.
Payrolls and orders are delayed this week due to the “Government Shutdown.”
Elizabeth Warren calls for Trump to release the jobs report despite shutdown [Oct 3]
(source – yahoo)
Given Warren’s enthusiasm, and given that Trump isn’t demanding release, I’m guessing it is bad news.
Credit & Rates
Fed Balance Sheet (WALCL) 6.59T -21.3B (-0.32% w/w) (prior -0.00% w/w)
Total Bank Credit (TOTBKCR) 18.73T +21.8B (+0.12% w/w) (prior +0.01% w/w) +761.4B [+4.06%] y/y
30 Year Mortgage Rate (MORTGAGE30US) 6.34% +4 bp
3 Month Treasury (DGS3MO) 3.95% -7 bp
10 Year Treasury (DGS10) 4.12% -8 bp
30 Year Treasury (DGS30) 4.71% -6 bp
20 Year Bond Fund (TLT) 89.38 +0.54%
We saw some QT this week (negative money printing!), and bank credit actually expanded (+6.24% annualized).
Rates moved lower; money flowed into both short, medium, and long-dated bonds. That caused TLT to move higher, but it was a modest move. The 3-month Treasury (-7 bp this week), which Ed Dowd likes to follow, appears to be leading Fed Funds lower. The 3-month period does the “cut” (or the “raise”), and then the Fed follows.
CME Fedwatch Tool projects a 96% chance of one cut on the October 29th meeting.
Currencies
The buck confettied a bit this week, losing 0.41 [-0.42%] to 97.42. Most of the damage happened on Monday/Tuesday. The buck remains in a slight weekly/monthly uptrend. So far, no confirmation from the buck regarding the upcoming War in Europe.
Winners: EUR [+0.41%], GBP [+0.54%], JPY [-1.36%], AUD [+0.98%]
Metals
Glorious Gold rose 99.90 [+2.62%] to 3908.90, which is a new all-time high. Most of the gains came on Monday and Friday.
by jim-h-2 
