Last week’s economic data was weak almost across the board. Surveys from the Institute for Supply Management for both manufacturing and non-manufacturing activity came in below estimates. The manufacturing survey should raise recessionary concerns, while September employment data was mixed, with a weak number of new jobs and average hourly earnings. At the same time, however, the unemployment rate fell from 3.7% to 3.5%, its lowest level in 50 years. Low unemployment and a strong consumer continue to carry the U.S. economy.
The week ahead will be focused on trade as the Chinese government comes to Washington, D.C., to negotiate a trade deal. In Europe, the slow-moving Brexit process will be closely watched. Given weak economic data and the dialogue for more Federal Reserve easing, I anticipate bond prices to experience heightened volatility.
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