U.S. Earnings Season Rolls Along, ECB Meets Next Week

Rates fall after data miss, continued earnings. Swap rates and Treasury yields fell 8-9 bps across the curve today after a weaker than expected Dallas Fed manufacturing level. The figure (-23.4) was substantially lower than the forecast of -11.0 and the lowest reading since July of 2022. Equity markets were rangebound as mixed earnings calls continued to roll in, highlighted by Coca-Cola and Ameriprise Financial. The S&P finished the day 0.09% higher, while the NASDAQ Composite declined 0.29%.

As Fed blackout period commences, ECB mulls half-point hike next week. In a recent interview, ECB Board member Schnabel said that “data dependence means that 50bps are not off the table,” when speaking about the ECB’s May 4th meeting. She continued by saying, “the data we have so far shows that inflation is higher and the economy more resilient than projected.” The comments were welcome following a period of measured outlooks from the ECB on the pace of near-term hiking, in contrast to previous meetings where predictions were firmer. Ahead of the meeting, ECB voters are waiting for inflation and bank lending data, which will be released 2 days prior to the meeting.   

Day ahead. Home sale data (10 AM ET) highlights the session’s activity and follows home price data at 9 AM. Richmond Fed manufacturing data will also be released at 10 AM, and crude oil figures will round the day out at 4:30 PM.