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Bonds End Week Slightly Changed on Stocks, Data

Fixed income markets ended the week only slightly changed as the week was largely free of the geopolitical turmoil seen in prior weeks.  Bonds took their lead from surging equity markets and the week's economic data. 

U.S. stocks closed at record highs on Wednesday as investors reacted to news of a partial trade deal with China.  While the deal itself did not address many of the more contentious issues, the agreement seemed to reduce the threat of additional escalation. 

The week's economic data was led by consumer and producer inflation releases which both showed low levels of price increases.  Friday's housing starts data was strong, as new home starts surged by nearly 17% to a 1.61 million unit annualized pace.  While favorable December weather may have boosted those numbers beyond a sustainable level, the data backs up recent record-high sentiment readings in the industry.

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