Solutions

Market Commentary

Treasuries mostly rallied while equities posted gains. Yields edged higher overnight and into early morning trading. After flash Purchasing Managers’ Index (PMI) reports for manufacturing and services missed consensus expectations, yields fell across the curve led by shorter tenors. Yields reversed course in the afternoon, drifting modestly higher. The long bond finished 1 basis point (bp) higher while the remainder of the curve ended 1-11 bps lower.

New home sales jumped 8.8% in March to a seasonally adjusted annual rate of 693K, despite mortgage rates remaining elevated. The rebound in sales beat expectations as all four regions of the U.S. saw increased new home sales during the month. The median sales price rose from $406,500 in February to $430,700 in March. In the Midwest, new home sales are up 5.3% month-over-month and are up 23.4% on an annual basis.

The Richmond Fed Manufacturing Index improved from -11 in March to -7 in April, roughly in-line with expectations. The shipments component index increased 4 points from -14 to -10, while new orders increased 8 points to -9 in April. The employment component declined during the month, falling to -2 from 0 in March. Manufacturing activity remains slow however firms were more optimistic about current and future local business conditions.

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.