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The weakness in the employment index, as well as the strength in inventories (+10.4 points to a new 2-year high of 58.4%), overshadowed to some extent the headline strength in the overall Dec Chicago Purchasing index. The softness in hiring and the jump in inventories point to weakness in the region's manufacturing activity down the road. |
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The Dec NY-area Purchasing Managers index climbed by +6.8 points to 63.2%. That pointed to a sharp acceleration in the region's overall business activity. However, the strength in the headline index stemmed solely from a +10.3 point jump in the non-manufacturing index to a very strong reading of 67.4%. The manufacturing index, however, plunged by 24.2 points to 25.8%, thereby pointing to a sharp contraction in factory activity. Looking ahead, the outlook index (which looks forward over the coming 6 months) climbed by +7.0 points to a very strong 65.6%. |
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The mixed performances of the NY and Chicago-area Purchasing Managers reports masked some underlying softness. In the NY index, that softness was seen in the plunge in the manufacturing index to 25.8%. In the Chicago index, that softness was seen in the slide in hiring and the sudden build-up in inventories. That should bolster expectations for further weakness in manufacturing activity down the road and fuel hopes for further Fed easing if such weakness spreads into the key non-manufacturing sectors of the economy. |
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US Interest RatesUS credit market settles a bit softer in thin year-end tradeMarch T-bonds last Thursday spiked lower early in the shortened session and then rebounded upward to finally settle a bit weaker. Futures closes: USH99 0-04 at 127-25; TYH99 0-01 at 119-05; FVH99 0-005 at 113-110; TUH99 +0-007 at 105-245; TBH99 .005 at 95.765; EDM99 .0100 at 95.0900. Cash closes (3PM NY): cash 30-yr 0-02 at 102-12; cash 30-yr yield +.004 at 5.094; cash 10-yr unch at 100-25; cash 10-yr yield unch at 4.651; cash 5-yr +0-01 at 98-25; cash 5-yr yield .007 at 4.532; cash 2-yr +0-035 at 100-065; cash 2-yr yield .069 at 4.494; 3-mo T-bill .049 at 4.381. |
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