Daily Market Color July 24, 2017Treasurys Edge Lower Ahead of Fed Meeting While Oil Rises with Expansion of OPEC Cuts US financial markets held within a tight range to open the week as investors looked ahead to the two-day Fed meeting beginning tomorrow while absorbing news of White Senior Adviser Jared Kushner’s communications with Russia during last year’s election. The FOMC is widely expected to hold the existing monetary policy in place, and its statement afterwards will be analyzed for any indications on the timing for the unwinding of the Fed’s balance sheet. In politics, the Trump administration again captured headlines after Jared Kushner met behind closed doors with the Senate Intelligence Committee this morning to discuss his dealings with Russia during the presidential campaign. In a public statement afterwards, Kushner repeated his stance that there was no collusion with Russia, and all actions taken were “proper.” US stock markets were mixed during the trading session, with the DJIA and S&P 500 posting marginal losses while the tech-heavy Nasdaq rose 0.35% ahead of the earnings reports from Google, Amazon and Facebook due this week. Treasurys edged lower as yields/swap rates gained 1-3 bps across the curve, bringing the yield on the 10-year note to 2.25%. The US dollar was relatively flat on the day, remaining near its lowest level in the past 15 months. Key economic data released on the day included June’s existing home sales, where the persistently low supply of homes on the market continues to drive prices higher and hold back sales growth. Sales of previously owned homes decreased 1.8% last month to a seasonally adjusted pace of 5.52 million, as per the National Association of Realtors. Existing home sales declined in three of four regions, with the South displaying the largest drop at 4.7%. Additionally, the median house price in the US rose to an all-time high of $263,800, up 6.6% YoY, as declines in supply continues to boost home prices despite wage growth remaining sluggish. The inventory of available homes has now fallen for 25 consecutive months on a YoY basis, with June 2017’s inventory totaling 1.96 million. The average time a home was on the market also held near historically low levels, coming in at 28 days during June. Abroad, a meeting amongst the OPEC and non-OPEC nations involved in January’s oil production-cutting pact took place in Russia earlier today. One of the central takeaways from the gathering was that Nigeria, an OPEC state initially exempted from the agreement as it recovers from years of conflict, would soon participate in the cuts and cap production at 1.8 million bpd. Additionally, OPEC’s largest producer, Saudi Arabia, announced its exports would decline by 1 million bpd YoY to 6.6 million bpd during August in response to increased domestic demand. Following the news, both WTI and Brent crude futures increased by roughly 1.25%, and are currently trading at $46.35/barrel and $48.60/barrel, respectively.