Interest Rate Roundup

Friday, May 15, 2009

CPI flat, Empire Manufacturing improves, production falls

More economic data continues to hit the tape. A quick recap: The Consumer Price Index was unchanged in April. That was a slight uptick from March's -0.1% reading. The core CPI rose 0.3%, up from the prior month's 0.2% gain. Overall CPI is now down 0.7% from a year earlier, the biggest drop since 1955, while the core CPI is rising at a 1.9% YOY rate.

Meanwhile, the Empire Manufacturing index was still in negative territory in May. But the -4.55 reading was an improvement from the -14.65 number for April. The new orders sub-index fell to -9.01 from -3.88, while the employment sub-index improved to -23.86 from -28.09. The index that tracks expectations about the economy six months down the road climbed to 43.8 from 33.1.

Market reaction? Not a heck of a lot in currencies and stocks. The dollar index is still up a bit, while stock futures are still down a bit. But bonds have given up almost all of their pre-data gains. The long bond futures were recently up 2/32 to 123 6/32 after touching 123 24/32 earlier. Gold is also popping to its morning high.

UPDATE: Industrial production dropped 0.5% in April. The prior month's decline was revised to -1.7% from the -1.5% originally reported. Capacity utilization fell to 69.1% from 69.4% in March.


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