Summary
United States: A Wild Week in a Data Desert
- It was a very quiet week on the U.S. economic data front, but financial markets were anything but calm. Last week’s run of weak U.S. data, capped by a troubling rise in the unemployment rate and a slowdown in nonfarm payroll growth, helped spark a wild week in global markets.
- Next week: CPI (Wed.), Retail Sales (Thu.), Industrial Production (Thu.)
International: Mixed Week for Foreign Central Banks, International Data
- Among this week’s central bank announcements, Australia and India held rates steady, and hawkish comments suggest rate cuts are still some months away. Mexico’s central bank cut rates 25 bps, given soft growth and despite elevated inflation, while we still see gradual easing going forward. In this week’s economic figures, Japan’s wage data were sturdy, while labor market data from Canada and New Zealand were mixed.
- Next week: U.K. CPI (Wed.), Japan GDP (Thu.), China Industrial Production and Retail Sales (Thu.)
Credit Market Insights: Households Are Feeling the Pinch
- The Q2 New York Fed Household Debt & Credit report signaled that even as households continue to borrow, debt has increased at a slower rate in recent quarters, suggesting consumers may be feeling the pinch of higher rates.
Topic of the Week: Have Lower Bond Yields Started the Easing Process Early?
- A monetary policy pivot looks to be forthcoming. A move down in long-term interest rates has raised hopes that the easing process may already be under way. Unfortunately, lower mortgage rates have yet to result in a meaningful pickup in the mortgage demand, one sector of the economy most likely to benefit from reduced rates.
