The curve is higher and steeper this morning with the belly and long-end up 5 to 6 bps while equity futures are up (Dow +0.75% and S&P +0.62%). The risk-on move is being driven by yesterday’s Fed meeting in which the central bank left open the possibility of continued stimulus in addition to the expected taper signal. Additionally, the current level of communication compared to what was provided in 2013 has helped bolster market confidence.
Initial jobless claims came in slightly higher than expected with 351,000 people filing for unemployment benefits compared to the median forecast of 320,000. This marks the second week in a row that jobless claims increased unexpectedly. It is important to remember that the weekly jobless claims data can be volatile and despite the recent upticks in the data, the labor market has generally strengthened and the number of claims has fallen dramatically since the start of this year.
Hafizan Hamzah
Director, Investment Management Group
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