Interest rates are flat and global equities are mixed ahead of home price data, a key consumer confidence survey, and a $35 billion 5-year Treasury note auction.
S&P 500 futures are 2.25 points higher at 1,140.00 and Dow futures are 33 points up at 10,783.
The 2-year Treasury note is -0-01 at 99-27 yielding 0.442%(+1.4bps) and the 10-year note is +0-01 at 100-27 yielding 2.528% (-0.04bps). The November delivery Fannie Mae 4.0 MBS coupon is UNCH at 102-21.
Light crude oil is trading 0.71% lower at $75.92 per barrel, and gold prices are -0.74% at $1,286.50 per ounce.
Taking a broader view, economists at BMO Capital Markets note that domestic equities have outperformed others in the developed world this year. The S&P 500 has risen 2.43% since January and the Dow has gained 3.68%.
“North American equity markets are still outperforming most of developed Europe in 2010 (Germany is the exception with a 5.6% gain), and are thumping both Japan and Australia, which have shed 10% and 4.1%, respectively,” they wrote in a morning note.
Meanwhile, the US dollar index was up slightly overnight at 79.39 ― near the lowest levels seen since February.
Key Events Today:
8:00 – Lawrence Summers, National Economic Council Director, participates in the National Journal's "Workforce of the Future" Conference in Washington.
9:00 ― The S&P Case-Shiller Home Price Index is expected to show that prices are up 3.2% in July compared to the prior year, according to Thomson Reuters, which notes that home prices fell 32% between 2006 and 2009. Prices have risen in each of the previous three months, pushing the index up 4.4% in the second quarter. But the increase is set to decelerate given recent weakness in the housing market.
“Already-available house price data for the month point to a significant downshift,” said economists at Nomura, who look for a +2.5% year-over-year change. “The Loan Performance index fell by 0.6% m-o-m, the FHFA index by 0.7% and the existing home median price index by 0.1%.”
10:00 ― Economists believe Consumer Confidence will take a dip in September, falling to 52.0 after the index increased 2.5 points to 53.5 in August. Consumers remains pessimistic about future business conditions and the unemployment rate remains near 10%.
Analysts at BBVA point out that this consumer confidence index decreased from 111.2 in February 2007 to its historical low of 25.3 in February 2009. They expect the index to be flat this month.
Economists at Deutsche Bank are more optimistic, citing recent gains in the stock market.
“The monthly change in consumer confidence has shown a significant correlation with the equity market (60%) over the past five years,” they said. “Thus we expect a slight increase in the index to 54.0 vs. 53.5 in August.”
4:30 ― Federal Reserve Board Governor Kevin Warsh participates in NYSE Panel on the Role of Capital Markets in Job Creation. Audience Q&A expected.
5:30 ― Federal Reserve Bank of Atlanta President Dennis Lockhart gives speech on the economy at Sewanee University. Audience Q&A expected, Media Q&A TBD.
OTHER EVENTS
- 10:00 Richmond Fed Manufacturing and Services Indices (Sep)
- 10:00 Business Roundtable CEO Outlook Survey (Q3)
- 10:15 Fed outright Treasury coupon purchase (01/15/11-02/15/40)
ISSUANCE
- 11:30 Treasury auctions $25 bln 4-week bills
- 13:00 Treasury auctions $35 bln 5-year notes
- Sri Lanka, $1 bln 10-year [guidance 6.5%]; BAML/HSBC/RBS
- Votorantim, $500m+ perp NC5; BAML/HSBC/Itau/MS
- Dubai, benchmark deal expected; DB/HSBC/SCB
- KTZ, deal expected following roadshow; Barc/HSBC/RBS
- Interbank, $400m+ 10-year expected this week; BAML/JPM
- Hyundai Cap Am, benchmark bond expected; Barc/Citi/HSBC/JPM
- BancoEstado, deal possible this week; DB/JPM
- BBVA Continental, $200m Tier 1 30NC10; CS/BBVA
- AWAS, $600m 6-year; GS/MS/DB
- Continental Trustees, $200m 30-year; CS/BBVA
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