Leader Week in Review - July 24th, 2015
Economic Data Releases:
A summer market, Chinese stock market gyrations and lower bond market liquidity all conspired to send yields lower and spreads higher over the last two weeks. The front end of the Treasury yield curve ended roughly flat, pricing off of Fed rate hike expectations while risk aversion drove longer-term yields. Credit spreads in both Inv. Grade and High Yield rose, weighed down by declining oil prices. Spreads are now either at or close to multi-year highs (chart 1).
Inflation has been running roughly between 1.5-2.0% over the last two years; the latest print of 1.8% YoY is right in the middle of the range (chart 2). More recent inflation is telling a different story, the 3-month annualized (dotted line) figure has been above the Fed’s 2% target for four straight months now. September looks primed and ready for liftoff!
Upcoming Economic Data Releases: