Daily Market Color

Market Uncertainty Sends Rates Lower

Yield curve flattens on cloudy economic outlook

Swap rates and yields fell along a flattening curve as China’s recent regulatory crackdown on public companies and the growing threat of the COVID delta variant have created volatility in both the equity and bond markets. The 10y UST yield fell 5 bps on the day to close at 1.24%. All three major equity indices declined on the day led by a rout in tech stocks with the tech-focused Nasdaq closing down 1.21%. Tomorrow all eyes will be on the Fed’s rate decision and Chair Powell’s subsequent press conference. While fed funds futures ascribe no chance of a hike tomorrow, markets will parse Powell’s words closely for any hints around future policy action or a slowing of the central bank’s bond purchases.

Durable goods orders increase in June

Durable good orders increased 0.8% in June, but missed economists’ estimates of 2.0% growth. The increase in June is now the thirteenth month of growth within the last fourteen months.

Consumer confidence rises for the 6th straight month

U.S. consumer confidence rose to a new pandemic high in July at 129.1, surpassing economists’ expectations of 123.9. Consumers have become more positive as the economy reopens, but did show concerns around rising prices and COVID cases.

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