Interest rates are on the rise again as equity futures inch higher ahead of a light day of economic data. President Obama’s mid-morning press conference on the economy may attract greater market attention than the only scheduled economic data release on the calendar, Wholesale Inventories.

One hour before the opening bell, S&P 500 futures are up 3.00 points to 1,105.50 and the 10 year Treasury note is -0-10 at 98-18 yielding 2.792% (+3.3bps). Meanwhile in the secondary mortgage market, after a session of aggressive selling, the October FNCL 4.0 MBS coupon is -0-06 at 102-01. This is the bottom of the range we've been following...

European equity markets are slightly weaker with the  CAC -0.02% and the Dax down 0.23%. The FTSE in London is +0.02%. Markets in Asia closed higher including a 1.55% gain in the Nikkei 225 and a 0.26% gain in Shanghai.

Key Events Today:

10:00 ― The final piece of data in the holiday-shortened week is Wholesale Inventories. Economists polled by Reuters anticipate the index to rise 0.4% in July following a 0.1% gain a month before. Forecasts range from +0.2% and +0.6%.

Despite the expected increased, economists at BMO said they don’t expect inventories to contribute to economic growth in Q3, as they have been in each of the previous four quarters. 

Economists at BBVA said accumulating inventory could reflect optimism on business conditions and labor markets. 

“The national IP index increased strongly in the month reflecting solid growth in durable goods production,” they added. “Part of this output could have added to stockpiles. In addition, the ISM-manufacturing inventory index reached the 50 point benchmark in July and continued to expand in August. This suggests that firms might be rebuilding inventories after a relatively long process of depletion caused by the economic downturn.”

11:00 ― President Barack Obama holds a White House news conference on the economy to discuss his proposed idea for a $50 billion infrastructure stimulus. He has also proposed accelerating $200 billion in business tax write-offs and extending a research and development tax credit costing $100 billion over 10 years, according to Reuters. 

“Obama says the U.S. can’t afford to extend tax cuts for the rich, enacted under former President George W. Bush, and has accused Republicans of being fiscally irresponsible,” the news agency said. “The White House hopes its latest policies will be winners with the public, despite dim chances Republicans will support them in Congress.”


  • CBA, potential benchmark deal; JPM
  • Santander Chile, benchmark deal likely following roadshow; Santander/DB/JPM