Weekly Bond Commentary
Markets are trying to ease into summer and hopefully a calmer, quieter time. Over the last week, they chopped around without making any real progress.
Economic data were a bit mixed, as May housing permits, starts and existing home sales all exceeded expectations, in spite of still-high mortgage rates. Likely a key support here is the weekly jobless claims, which were unchanged at historically low levels over the last week. On the negative side, the preliminary June purchasing managers’ index weakened. That was below expectations, though it remains in expansionary territory. Both sub-components, manufacturing and services, weakened from their May readings. At an average index of 53.6 for the second quarter, compared to 49.7 for the first quarter, this measure points to stronger economic growth this quarter than the 1.3% growth domestic product (GDP) growth seen in the first quarter.
With little first-tier economic data next week and the next Federal Open Market Committee meeting on July 26, markets will turn their attention to the upcoming Fourth of July and summertime.