Leader Week in Review - July 31st, 2015
Economic Data Releases:
Treasury yields were moderately lower after Q2 GDP of 2.3% disappointed estimates for 2.5%. The Atlanta Fed’s GDPNow estimate has been spot-on so far this year – nailing the initial number for both Q1 and Q2 (chart 1). Further driving yields lower was the Employment Cost Index coming in at just 0.2% for Q2, as investors pushed out their Fed rate hike expectations. Despite the weaker tone to the economic data, the Fed’s latest post-FOMC meeting statement was distinctly hawkish and again showed their intent to raise rates this year.
Credit spreads were mixed for the week, with High Yield spreads tightening 16 bps while Investment Grade spreads ticked wider. High Yield spreads have been trading off of oil prices all year, while only more recently have oil prices weighed on Investment Grade credit (chart 2).
Upcoming Economic Data Releases: