Daily Market Color April 18, 2017Treasurys Resume Rally as Geopolitical Concerns Persist US economic data released on the day did little to alter the risk-off trading that has characterized global financial markets over the past week. This morning the Commerce Department reported a 6.8% decrease in housing starts during March, totaling an annualized rate of 1.215 million which represents the lowest figure since November. Single family home construction declined 6.2% in the month while multifamily starts dropped 7.9%, albeit both components are up nearly 10% YoY. Building permits recorded a larger than expected rise last month to a 1.26 million annualized rate, up 3.6% MoM. In a separate report, industrial production during the month of March matched expectations in rising 0.5%, as a record 8.6% utilities surge boosted the headline figure, likely a result of the Category 3 storm experienced in the Northeast. Also affected by the weather, manufacturing production shed 0.4% last month, significantly weaker than median forecasts of a 0.1% increase. US Treasurys rallied throughout the session as yields/swap rates fell 4-9 bps across the curve to their lowest levels of 2017. Geopolitical concerns, notably mounting tensions surrounding the North Korean nuclear program and the first round of the French presidential election set for Sunday, continue to drive a flight to quality. All three major US stock indices closed 0.10%-0.55% lower for the day, with Goldman Sachs (-5%) and Johnson & Johnson (-3%) highlighting losses after reporting weaker than expected quarterly earnings. The US dollar declined 0.5% against major currencies, emphasized by the pound recording a 2.2% gain to $1.28/GBP. The surge in the pound was largely driven by the calling for an early election by British Prime Minister Theresa May in an effort to secure her position as the nation enters Brexit negotiations.