Rates Fall in Holiday Shortened Session

 

Rates decline in volatile session. Weak PMIs in Europe and the US sent rates tumbling lower in the holiday-shortened session. Treasury yields fell 2-4 basis points across the curve, the 10 year Treasury yield falling to 2.56%. The MOVE Index- a measure of interest rate volatility- rose to 48.7, maintaining its sustained level above 45. Fed funds futures now imply a 51.8% likelihood of a rate cut by 2020.

 

 

US equities finish higher after opening lower. S&P 500 volume was 4.31% above normal levels as the index recovered from a slow start to close 0.24% in the black. The index was led higher by industrials and real estate sectors, energy and financials sectors the lone laggards.

 

 

Week ahead. Early in the week investors will get a slew of housing data in the form of existing and new home sales. Later in the week investors will get their usual snapshot into jobless claims before receiving the Q1 GDP figures on Friday. Currently markets expect GDP to rise by 1.5% in the first quarter, despite the headwinds from the government shutdown and trade tensions.