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Yield Curve Flattens During Quiet Week

The yield curve flattened slightly during a relatively quiet week as shorter-dated Treasury yields climbed slightly while longer-dated Treasuries declined, with the ten-year notching a 7 bps decline to 1.76%.  The week's economic calendar arrived largely as expected, although a few releases did surprise to the updside. 

Building permits climbed at a 5% rate during the month of October, countering expectations of a decline.  While housing starts climbed a bit less than forecast, when taken together the two releases indicate that the residential housing market continues to benefit from low mortgage rates.  On Friday, both the Markit Manufacturing and Services purchasing managers indices arrived with stronger than forecast readings.  The manufacturing PMI release was especially well-received, as the sector seems to be rebounding from the weakness registered earlier in the year.

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