Quantifying weak economic momentum
It may be worth taking a look at the Citi Economic Surprise index. The index measures the strength/weakness of economic indicators relative to the trade's estimate. Notice that the index has been falling in recent weeks, and has highlighted the flow of soft date to expectations. Although the index is down, it is well above prior roughs. None-the-less, economists are likely to be more cautious in looking for growth in the coming weeks given the trend in the data and this may provide some support to the index in the coming weeks. It is also possible the natural ebb and flow helps to support the data -- note the recent decline in unemployment claims. The graphic suggests the Fed's twist and credit stress in Europe has reduced the sensitivity of the treasury market to economic news flows.
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*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.
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