Morning Market Update: July 18, 2019

Treasury Yields Rise as Equities Decrease

Commentary for Wednesday: Treasurys rallied with the curve flatter, while equities decreased. Yields were initially little changed in quiet overnight trading and throughout the early morning. Yields briefly dipped on weaker-than-expected economic data released on housing starts and continued lower into the afternoon. Yields were little changed following the Fed's release of its Beige Book and ended 3-5 basis points lower with the curve flatter.  
This Morning: Treasury yields rose following the release of economic data on Initial Jobless Claims and Continuing Claims. 

Housing starts
declined 0.9% to an annual rate of 1,253K in June, slightly lower than expected. The prior month was downwardly revised from 1,269K to 1,265K. Weighing on starts in June, multifamily starts fell 9.4%, which were only partially offset by single family starts rising 3.5%. By region, the Northeast rose 31.3% and the Midwest grew 27.1%. The South, however, declined 9.2% and the West fell 4.9%. On an annual basis, housing starts are still 6.2% higher than one year ago. 

The Federal Reserve
released its Beige Book reporting on activity from mid-May to early July. It stated the outlook generally was positive for the coming months, with expectations of continued modest growth, despite widespread concerns about the possible negative impact of trade-related uncertainty. Specifically in the Chicago district, economic activity was little changed with a continued tight labor market and modest wage growth. 

Financial Markets Research


The morning market update is provided by: 

solutionsheadshots_hotchkiss_smJames Hotchkiss
Director, Member Strategy and Solutions

SolutionsHeadshots_Deven_smMelissa Deven
Director, Member Strategy and Solutions


The data and valuations provided in this document are for information purposes only and are provided as an accommodation and without charge. The Federal Home Loan Bank of Chicago makes no representations or warranties about the accuracy or suitability of any information in this document. This document is not intended to constitute legal, investment, or financial advice or the rendering of legal, consulting, or other professional services of any kind.

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