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US: Fed Rate Hike Still Favorable Despite Weak Jobs Data
- June’s jobs report came in better than expected, showing a clear slowdown in recent hiring trends. However, the Fed still has the green light to resume monetary tightening on July 26, given continued economic resilience and generally strong data.
- Next Week: CPI (Wed), Consumer Confidence (Fri)
International: Promoting economic signals from Japan
- The Bank of Japan’s Tankan survey showed early signs that Japan’s recovery will continue and possibly gain momentum during the second quarter. The result suggests there are upside risks to the 1.2% GDP growth forecast for 2023, and could ultimately lead to a more hawkish BOJ policy shift later this year.
- Next week: Reserve Bank of New Zealand policy rate (Wednesday), Bank of Canada policy rate (Wednesday), UK monthly GDP (Thursday)
Interest Rate Watch: Is It A Failure? Better Check It Before You Get There
- Congratulations on the 247th anniversary of the founding of the United States and the first anniversary of the realization of an inverted yield curve. This week’s Interest Rate Watch takes the opportunity to point out that 10-year and 2-year Treasury spreads have reached their widest gap in more than 40 years. How much is it okay to turn a blind eye to an inverse curve?
Credit Market Insights: Main Street Lending Terms Tighter in Q1
- Last Friday, the Kansas City Fed released its first-quarter Small Business Lending Survey (SBLS). The survey provides the first snapshot of lending activity and lending terms for SMEs, a key component of the domestic economy, since the banking turmoil in the first quarter.
Topic of the week: Digging deeper into the surge in manufacturing construction spending
- Manufacturing construction remains booming, according to the latest construction spending data for May reported this week. A surge in new manufacturing projects has been a boon to some regions, largely reflecting the construction of electric vehicle supply chains and semiconductor manufacturing facilities.
