Economic Analysis | US JAMES F. OSULLIVAN Chief Economist +1 212 589 6479 josullivan@mfglobal.com STEPHANIE S.

CHENG Economist +1 212 589 6373 scheng@mfglobal.com

JUNE 17, 2011

INSTITUTIONAL USE ONLY

MF Global Weekly Report

MACRO FOR MARKETS

CONTENTS

No Growth Rebound Yet; Core Inflation Up

We continue to expect growth to show renewed upward momentum soon, helped by a fading or reversal of some of the factors that have contributed to weakness recently. That said, a turnaround is not evident yet. Against that backdrop, we expect a clear on hold signal from Fed officials in the statement released after the upcoming FOMC meeting as well as the chairmans post-meeting press briefing. The disappointing data recently will likely be noted, but we doubt officials are ready to extrapolate much of the weakness yet. In the other direction, underlying (i.e., core) inflation has accelerated recently, even if it is still subdued. Indeed, following the latest CPI report, we raised slightly our 2011 forecast for core and total inflation. We now expect the core CPI to rise 1.8% this year (Q4/Q4), instead of 1.6%.

Pg. 2 | No Growth Rebound Yet; Core Inflation Up Pg. 6 | Taylor Rule Suggests Fed Tightening if Officials Unemployment and Inflation Projections Stay on Track Pg. 8 | Forecast Summary Pg. 9 | Data Preview Pg. 13 | Calendar

Taylor Rule Suggests Fed Tightening if Officials Unemployment and Inflation Projections Stay on Track
Weaker than expected growth, combined with Eurozone debt turmoil and, perhaps, increased expectations for some fiscal tightening have led to significantly reduced market expectations for Fed tightening. Fed funds futures contracts now appear to be pricing in only about a 0.5% funds rate at the end of 2012. We realize Fed officials do not mechanically follow a Taylor Rule in setting monetary policy, and expectations for growth are being pared a little, but, based on the original Taylor Rule and adjusting for stimulus from balance sheet expansion, we calculate that the last set of Fed projections was consistent with about a 3% funds rate at the end of 2012.

Preview: Home Sales Down, Durables and GDP Up

Along with the Fed meeting and the usual weekly data, highlights will include new and existing home sales (we expect declines in both series), home prices (we forecast stabilization), durable goods orders (up solidly), and revised Q1 GDP growth (we expect a 0.5-point upward revision). Based on the original Taylor Rule, and adjusting for stimulus from balance sheet expansion, we estimate the last set of central tendency projections from Fed officials would prescribe about a 3% funds rate at the end of 2012, and 3 3/4% at the end of 2013.
Fed funds rate, % 20 16 12 8 4 0 -4 -8 60 66 72 78 84 90 96 02 08 Taylor Rule** Actual funds rate Taylor Rule, adjusted for balance sheet expansion***

20 15
2011-13 10 est with Fed 5 CTPs*

0 -5

*, **, *** See chart on page 6 for notes. Shaded bars represent periods of recession. Source: Federal Reserve, Bureau of Economic Analysis, Bureau of Labor Statistics, Congressional Budget Office (CBO), and MF Global

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Economic Analysis | US 6/17/2011 | MACRO FOR MARKETS

NO GROWTH REBOUND YET; CORE INFLATION UP We continue to expect growth to show renewed upward momentum in the next few months, helped by a fading or reversal of some of the factors that have contributed to greater-thanexpected weakness recentlyincluding the Q1 spike in oil prices, Japan-related supply-chain disruptions, and extreme weather. That said, a turnaround is not evident yet. While this past weeks jobless claims reading was encouraging (with a drop to 414,000 from 430,000), regional manufacturing surveys were weak (with the headline New York and Philadelphia Fed indexes dropping below zero). The ongoing Eurozone debt crisis is not helping either, potentially undermining business and consumer confidence through its impact on the equity market. Against that backdrop, we expect a clear on hold signal from Fed officials in the statement released after the upcoming FOMC meeting as well as the chairmans post-meeting press briefing with no imminent change in either the funds rate or the size of the balance sheet once the $600 billion asset purchase program is completed this month. The disappointing data recently will likely be noted in the statement, but we doubt officials are ready to extrapolate much of the weakness yet. We expect only a modest lowering of officials growth projections. In the other direction, officials will likely also have to acknowledge that underlying (i.e., core) inflation has accelerated recently, even if it is still subdued. Indeed, following the latest CPI report we have raised slightly our forecast for core and total inflation this year (details below). No More Fed Easing The weakening in the growth data has inevitably led to speculation about another round of Fed asset purchases, or QE3 in the terminology of most people outside of the Fed. If our forecast for the economy is right, QE3 will clearly not happen; instead, we expect the Fed to just stay on hold in coming months (including a freeze on the size of the balance sheet) and then start unwinding some of its accommodation in 2012. But what if growth continues to disappoint? We believe QE3 is highly unlikely. We are not saying there is no chance; ultimately, Fed officials will do whatever it takes. However, in our view, the data would need to show much more decisive weakening, on a sustained basis, and not just for growth; the inflation and inflation expectations measures will also be very important. As of now at least, the unemployment rate is lower, the latest trend in core inflation is higher, and inflation expectations measures, particularly the TIPS five-year, five-year forward measure, are higher than they were when officials started to signal round two of asset purchases a year ago. Plus, the criticism the Fed received last time would likely make officials

Some, but not all, of the recent spike in claims has been reversed. Claims fell to 414,000 from 430,000 in the latest report.
670 570 470 Jun 11 370 270 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 4-week average
Source: Department of Labor and MF Global

initial claims, 000s , sawr

Weekly

The current activity indexes in both the New York and the Philadelphia Fed manufacturing surveys fell below zero in June. While very weak, the data can change direction quickly. Both indexes fell below zero in 2010, albeit not at the same time.
current activity index, sa 51 34 17 0 -17 -34 -51 90 95 NY Fed 00 05 10 Jun

Philadelphia Fed

Note: Shaded bars represent periods of recession. Source: Federal Reserve Banks of New York and Philadelphia

Business confidence fell only modestly in Q2 according to the latest Business Roundtable survey.
index, quarterly 115 95 75 55 35 15 -5 02 03 04 05 06 07 08 09 10 11 12 Business Roundtable CEO Economic Outlook (l) University of Michigan consumer expectations (r)
Source: Business Roundtable and The University of Michigan

index, monthly Q2

105 95 85

75 June prelim 65 55 45

Economic Analysis | US 6/17/2011 | MACRO FOR MARKETS

less quick to respond this time. In short, never say never, but QE3 is highly, highly unlikely unless the recovery is much weaker than just disappointing; it has to be faltering, and inflation and inflation expectations measures would need to start moving down again. That has certainly not happened yet. Clear Pickup in Core Inflation The 0.3% m/m rise in the core CPI in May boosted the 2011-todate increase (May vs. December) to 2.4% at an annual rate from 2.1% through April. The core CPI rose just 0.8% in 2010 (December to December). Moreover, the pickup has been fairly broad-based (see table). The Feds preferred core PCE price index measure likely rose less than the core CPI in Maywe estimate a 0.2% m/m rise but it also shows a clear pickup this year. Our 0.2% m/m estimate for May implies a 2011-to-date pace of 2.0% at an annual rate, up from a 0.8% gain in 2010 (December to December). Such short-term calculations can be volatile, and we do not believe the trend in core inflation is quite back to the roughly 2% pace considered ideal by most Fed officials. On a y/y basis, we estimate the core PCE measure was up 1.1% y/y in May, following 1.0% in April. The core CPI was up 1.5% y/y in May. Still, the turnaround since last fall, when Fed officials were increasingly worried about deflation risks, has been striking. We now expect the y/y pace in the core CPI to be up to 1.8% in Q4 of 2011, instead of 1.6%, with the pace in the core PCE index up to 1.5%, instead of 1.3%. Even those new estimates assume a significant slowing relative to the first five months of the year. For the total CPI, we now forecast 2.8% y/y in Q4 of this year, instead of 2.4%. (The total CPI was 3.6% y/y in May.) The recent weakening in commodity prices will likely contribute to some slowing in core consumer prices in coming months, to the extent the recent acceleration in core prices may have reflected some pass-through effects. Both new and used vehicles prices are also likely to slow, with the sharp pickup recently probably exaggerated by inventory shortages related to Japan supplychain effects. Conversely, the trend in import prices suggests further acceleration in the apparel component (see top right chart on following page), while rents are likely to continue accelerating if the labor market continues to improve, as we expect. The rate of growth in employment is a key driver of rental demand, and payrolls show a clear pickup this year, even with the weaker-thanexpected May data. (Gains have averaged 157,000 per month, up from 78,000 in 2010.)

The overall CPI was up 3.6% y/y in May, a pickup from 1.5% y/y in December. It has risen at a 5.1% annual rate so far this year (May vs. December). The recent decline in oil prices is likely to lead to a reversal of some of that pickup in coming months. The core CPI has also accelerated this year, to 1.5% y/y in May from 0.8% y/y in December.
%y/y, nsa 6 3 0 -3 05 06 07 08 09 10 11

May

Total CPI
Source: Bureau of Labor Statistics

Core CPI

The core CPI shows a 2.4% annual rate so far this year (May vs. December), up from 0.8% in 2010 (December to December).The pickup has been fairly broad-based, although two categories have been especially important contributors: shelter (mainly rents) and vehicles.
% ch, annual rate, unless noted 2010* 2011 THRU MAY** 2.4 1.3 1.5 1.1 6.3 1.1 2.3 8.4 7.2 13.1 3.2 1.7 1.6 0.2 ACCEL/ DECEL. (2011 vs. 2010, pct pcts) 1.6 0.9 0.7 0.9 3.8 3.6 3.4 8.6 3.5 7.3 -0.1 2.4 0.3 -1.7 CONTRIBUT. TO ACCEL/DECEL pct pts.) 1.6 0.4 0.1 0.3 0.0 0.2 0.2 0.5 0.1 0.1 0.0 0.2 0.0 -0.1

CORE CPI SHELTER (41.6%) RESIDL RENT (7.7%) OER (32.4%) LODGING (1.0%) FURNISH/OPS (5.9%) APPAREL (4.8%) NEW VEHICLES (5.6%) USED VEHICLES (2.6%) AIRFARES (1.0%) MEDICAL CARE (8.4%) RECREATION (8.3%) EDUC, COMMUN (8.3%) OTHER (4.5%)

0.8 0.4 0.8 0.3 2.5 -2.5 -1.1 -0.2 3.7 5.8 3.3 -0.8 1.3 1.9

*December 2010 vs. December 2009 (nsa) **May 2011 vs. December 2010 (sa) Source: Bureau of Labor Statistics and MF Global

Economic Analysis | US 6/17/2011 | MACRO FOR MARKETS

Claims Still Show Net Risebut Not Cumulating Weakness As noted, the latest jobless claims data were encouraging, with the weekly reading down to 414,000 from 430,000. At 425,000, the four-week average is still up about 30,000 from the trend in March, although the four-week average was as high as 440,000 a month ago (see top chart on page 2). In short, the data are not showing cumulating weakness in the overall economy, which cautions against extrapolating the sharp dropoff in the current activity indexes in the New York and Philadelphia Fed manufacturing surveys. Those regional indexes can change direction quickly, and both turned negative briefly in 2010 (albeit not in the same monthsee middle chart on page 2). Labor cost data do not suggest a continuation of the recent sharp uptrend in core inflation, although gains have stopped slowing recently, even with unemployment at a high level. The pattern is likely due in part at least to the upward pull from well-anchored inflation expectations. Another factor could be nominal rigidities, with widespread aversion to outright cuts.
%y/y 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 Q1 Q2* Q1 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 ECI: wages and salaries ECI: total Average hourly earnings (all private sector employees)**
*Through May. **Series starts in 2006. Source: Bureau of Labor Statistics

The modest drop in the Business Roundtables CEO confidence index in Q2 was also encouraging: after rising from 101.0 in Q4 to 113.0 in Q1, the index fell to 109.9 in Q2 (see bottom chart on page 2). Indeed, the Q2 reading was the second highest on record (second only to Q1), with history starting in 2002. Business confidence is likely to be a more important determinant of the trend in growth in coming months than consumer confidence, with consumer confidence ultimately driven by the extent to which hiring picks up.

A pickup in apparel prices in the CPI looks consistent with the pattern in import prices. Indeed, apparel import prices are signaling further acceleration.
8 6 4 May 2 0 -2 07 08 CPI: apparel 09 10 11 % y/y, nsa

Import prices: apparel & accessories, manufactured goods

Source: Bureau of Labor Statistics

Weakening in TV import prices has offset part of the impact of the surge in apparel import prices on overall consumer goods import prices, although the data have not shown much correlation with TV prices in the CPI.
0 -5 % y/y, nsa

Despite the surge in apparel import prices, the pickup in overall consumer goods import prices has been fairly modest thus far.
%y/y 4 2 0 -2 -4 -6 -8 07 08 09 10 11 Nonauto consumer goods import price (l) Core goods CPI (l) Real broad dollar index (r)
Source: Federal Reserve Board and Bureau of Labor Statistics

%y/y, inverted -12 May -7 -2 3 8 13 18

-10 -15 -20 -25 -30 07 08 09 10 11 CPI: television sets Import prices: television and video receivers
Source:Bureau of Labor Statistics

May

Economic Analysis | US 6/17/2011 | MACRO FOR MARKETS

FOMC Statement Likely to Once Again Signal No Rush to Tighten The April 27 FOMC statement (below) was very similar to the March 15 version, consistent with no new message on policy. While the easing cycle was expected to end at mid-year, when the $600 billion purchase program is completed, officials still appeared in no rush to tighten. Moreover, in his post-meeting press briefing the chairman clearly signaled the intention to continue reinvesting maturing securities when the $600 billion program is completed at mid-yearat least initially. Such forward guidance on reinvesting was not included in the FOMC statement. Mr. Bernanke made clear that a likely small first step in the tightening process would be when the Fed stops reinvesting maturing securities, but even that step would depend on the outlook.

FOMC StatementsApril 27, 2011 versus March 15, 2011 (New wording is highlighted in bold)

Information received since the Federal Open Market Committee met in March January indicates suggests that the economic recovery is proceeding at a moderate pace on a firmer footing, and overall conditions in the labor market are appear to be improving gradually. Household spending and business investment in equipment and software continue to expand. However, investment in nonresidential structures is still weak, and the housing sector continues to be depressed. Commodity prices have risen significantly since last the summer, and concerns about global supplies of crude oil have contributed to a further increase sharp run-up in oil prices since the Committee met in March in recent weeks. Inflation has picked up in recent months, but Nonetheless, longer-term inflation expectations have remained stable, and measures of underlying inflation are still have been subdued. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Currently, Tthe unemployment rate remains elevated, and measures of underlying inflation continue to be somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. The recent Iincreases in the prices of energy and other commodities have pushed up inflation in recent months are currently putting upward pressure on inflation. The Committee expects these effects to be transitory, but it will pay close attention to the evolution of inflation and inflation expectations. The Committee continues to anticipate a gradual return to higher levels of resource utilization in a context of price stability. To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to continue expanding its holdings of securities as announced in November. In particular, the Committee is maintaining its existing policy of reinvesting principal payments from its securities holdings and will complete intends to purchases of $600 billion of longer-term Treasury securities by the end of the current second quarter of 2011. The Committee will regularly review the size and composition pace of its securities holdings purchases and the overall size of the asset-purchase program in light of incoming information and is prepared to will adjust those holdings the program as needed to best foster maximum employment and price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period. The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate. Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen.

Economic Analysis | US 6/17/2011 | MACRO FOR MARKETS

TAYLOR RULE SUGGESTS FED TIGHTENING IF OFFICIALS UNEMPLOYMENT AND INFLATION PROJECTIONS STAY ON TRACK Weaker than expected growth data, combined with Eurozone debt turmoil and, perhaps, increased expectations for some fiscal tightening have led to significantly reduced expectations in financial markets for Fed tightening. Fed funds futures contracts appear to be pricing in only about a 0.5% funds rate at the end of 2012, down from around 1.5% two months ago. And, certainly, we would not expect tightening if the growth data continue to disappoint and the unemployment rate remains over 9% on a sustained basis. However, we expect the growth data to improve enough to keep the unemployment rate trending lower. (The 9.1% level in May was down from 9.6% in Q4, even with increases in April and May.) Meanwhile, as discussed on page 3, the underlying trend in inflation has moved up over the past year. While tightening is clearly not imminent, it is almost inevitable eventually if the unemployment rate continues to decline and the trend in inflation is edging up. The only questions are when? and how fast? We realize Fed officials do not mechanically follow a Taylor Rule in setting monetary policy. Indeed, there is no single Taylor Rule, with many analysts empirically deriving Taylor Rules based on how the Fed has acted in the past. However, the Fed chairman is on record defending policy based on the original Taylor Rule, and, based on that version, and adjusting for stimulus from balance sheet expansion (an additional complication), we estimate the last set of central tendency projections from Fed officials would prescribe about a 3% funds rate at the end of 2012. That 3% calculation reflects a 1% figure without adjusting for the stimulus from balance sheet expansion and the equivalent of two points of stimulus from the enlarged balance sheet (allowing for a $300 billion decline in total Fed assets next year). While we are not suggesting that the results be taken literally, and the estimates will likely change a little after Fed officials update their central tendency projections at the upcoming meeting, the calculations support our view that financial markets are pricing in too little tightening in 2012. Here are the details behind our calculations: The original Taylor Rule, based on the GDP output gap (the % deviation between actual and potential GDP) and inflation, calculates the appropriate level of the federal funds (FF) rate as follows:
FF rate (%) = 2 + Inflation + 0.5 (Inflation 2) 0.5 Output gap

Based on the original Taylor Rule, and adjusting for stimulus from balance sheet expansion, we estimate the latest set of central tendency projections from Fed officials would prescribe about a 3% funds rate at the end of 2012 (see text for details). We are not suggesting that the results be taken literally, and the estimates will likely change a little after Fed officials update their central tendency projections at the upcoming meeting, but the calculations provide reason to believe short-term fixed income markets will need to adjust significantly if the recent weakening in the growth data is not sustained. Fed funds futures contracts now appear to be pricing in only about a 0.5% funds rate at the end of 2012.
Fed funds rate, % 20 16 12 8 4 0 -4 -8 60 66 72 78 Taylor Rule** Actual funds rate Taylor Rule, adjusted for balance sheet expansion*** 84 90 96 02 08 201113 est 15 with Fed 10 CTPs*

20

5 0

-5

* Using latest set of Fed officials' central tendency projections (CTPs) **Modified original Taylor Rule, using unemployment rate (UE) gap (difference between unemployment rate and estimated full-employment unemployment rate) instead of output gap and assuming a 0.5-point change in the unemployment rate for every 1.0 point change in the output gap. Specifically: Fed funds = 2.0 + Core PCE inflation + 0.5 x (Core PCE inflation - 2.0) - 0.5 x UE gap. For estimated fullemployment unemployment rate we use Congressional Budget Office historical estimates through 2010 and Fed officials' latest "longer-run" projection for 2011-13. *** Modified original Taylor Rule using unemployment rate gap (** above), adjusted for stimulus from balance sheet expansion, assuming every $200 billion of balance sheet expansion is equivalent to an additional 25 bps of easing through the funds rate. Projections assume a $2.875 trillion balance sheet at end-2011, $2.575 trillion at end-2012, and $2.275 trillion at end-2013.. Source: Federal Reserve, Bureau of Economic Analysis, Bureau of Labor Statistics, Congressional Budget Office (CBO), and MF Global

Here are Fed officials latest central tendency projections. The projected unemployment rate will likely be raised slightly at the upcoming FOMC meeting, but not enough to change the estimates in the chart above significantly.
%Q4/Q4, sa, unless noted REAL GDP UNEMPL. RATE (Q4, %, sa) PCE INFLATION CORE PCE INFLATION Source: Federal Reserve 2011 3.1-3.3 8.4-8.7 2.1-2.8 1.3-1.6 2012 3.5-4.2 7.6-7.9 1.2-2.0 1.3-1.8 2013 3.5-4.3 6.8-7.2 1.4-2.0 1.4-2.0 LONGER RUN 2.5-2.8 5.2-5.6 1.7-2.0

Economic Analysis | US 6/17/2011 | MACRO FOR MARKETS

A modified original Taylor Rule, using the more observable unemployment rate rather than the output gapand more specifically, the unemployment gap, which is the difference between the unemployment rate and the estimated fullemployment unemployment rateand allowing for a 0.5-point change in the unemployment rate for every one-point change in the output gap (roughly the Okuns Law relationship based on recent experience), has the funds rate (%) =
2 + Inflation + 0.5 (Inflation 2) 1.0 Unemployment gap

At 9.1%, the May reading for the unemployment rate was up from 8.8% in March but down from 9.6% in Q4.
percent 11 9 7 5 3 79 84 89 94 99 04 09 14 May 19.0 15.5 12.0 8.5 5.0

Based on the mid-point of central tendency projections, Fed officials are currently projecting a 1.55% trend in inflation at the end of 2012 (using core PCE prices) and a 7.75% level for the unemployment rate. In turn, a 7.75% unemployment rate implies an unemployment gap of 2.35% (using the mid-point of officials longer-term projection for the unemployment rate as the estimated full-employment unemployment rate). Incorporating those figures in the equation above yields a 1.0% level for the prescribed funds rate:
2 + 1.55 + 0.5 (1.55 2) 1.0 2.35 = 1.0%

Unemployment rate
Source: Bureau of Labor Statistics

We estimate the core PCE price index was up 1.1% y/y in May, still below the 1.7-2.0% pace considered ideal by Fed officials (based on the longer-run figure in the last set of central tendency projections), but up from 0.8% y/y at the end of 2011. That measure has risen at an estimated 2.0% annual rate so far this year (May vs. December). Inflation expectations indicators have shown little net change from average levels in recent years; last years drop in breakeven inflation rates priced into Treasury Inflation-Protected Securities (TIPS) has been reversed. Continued resilience in inflation expectations is likely helping offset the downward pressure on inflation from the high unemployment rate.
4 3 2 1 0 07 08 09 10 11 12 Core PCE prices (y/y) Core CPI (y/y) Michigan median 5-10 year inflation expectations TIPS 5-year, 5-year forward inflation compensation % Jun prelim Jun 14 4 4 3 3 2

The original Taylor Rule only allowed for conventional policy action, with stimulus provided only through the funds rate. Meanwhile, Fed officials have estimated that every $200 billion of balance sheet expansion is equivalent to around 25 bps of conventional easing. A $2.0 trillion expansion of the balance sheet, to an estimated $2.9 trillion at the end of this month from $0.9 trillion before the crisis, is thus worth an extra 250 bps. In the chart on page 6 we are allowing for about a $300 billion decline in the size of the Fed balance sheet in 2012, reducing the stimulus from that source to the equivalent of around 210 bps. As a result, the prescribed funds rate after adjusting for the expanded balance sheet would be around 3% at the end of 2012. Note that the co-efficient on the unemployment gap in the equation is 1.0, so even a 0.5 point boost to the estimated unemployment rate would only lower the prescribed funds rate by 0.5 percentage point. Again, we are not suggesting that these estimates be taken literally (we are currently forecasting a 1.5% funds rate at the end of 2012), but they provide reason to believe fixed income markets will need to adjust significantly if the unemployment rate continues to trend down.

2 May May est* 1 1 0

*Including estimated 0.2% m/m rise in May Source: Bureau of Economic Analysis, Bureau of Labor Statistics, Federal Reserve Board, and MF Global

Economic Analysis | US 6/17/2011 | MACRO FOR MARKETS

MF GLOBAL U.S. ECONOMIC FORECAST SUMMARY

% change from previous period, annual rate (ar), except where noted; forecasts in bold 2010 Q1 REAL GDP FINAL SALES DOMESTIC FINAL SALES NET EXPORTS (pct pt contr) INVENTORIES (pct pt contr) CONSUMPTION BUSINESS FIXED INVESTMENT STRUCTURES EQUIPMENT & SOFTWARE RESIDENTIAL INVESTMENT EXPORTS IMPORTS GOVERNMENT INVENTORIES (ch $bil ar) CPI CORE CPI CORE PCE PRICES UNEMPLOYMENT (%, level) FEDERAL BUDGET BAl ($bil, fy) % OF GDP INTEREST RATES (%, level, eop) FED FUNDS TARGET 2-YEAR TREASURY 10-YEAR TREASURY 0.13 1.0 3.8 0.13 0.6 3.0 0.13 0.4 2.5 0.13 0.6 3.3 0.13 0.8 3.5 0.13 0.5 3.1 0.13 1.1 3.6 0.13 1.5 3.9 0.1 0.7 3.2 0.1 1.0 3.5 1.0 2.2 4.1 0.13 0.6 3.3 3.7 1.1 1.3 -0.3 2.6 1.9 7.8 -17.8 20.5 -12.3 11.4 11.2 -1.6 44 1.3 0.0 1.2 9.7 Q2 1.7 0.9 4.3 -3.5 0.8 2.2 17.2 -0.5 24.8 25.6 9.1 33.5 3.9 69 -0.5 0.8 1.0 9.6 Q3 2.6 0.9 2.6 -1.7 1.6 2.4 10.0 -3.6 15.4 -27.3 6.7 16.8 3.9 121 1.4 1.1 0.5 9.6 Q4 3.1 6.7 3.2 3.3 -3.4 4.0 7.7 7.7 7.7 3.3 8.6 -12.6 -1.7 16 2.6 0.6 0.4 9.6 Q1 1.8 0.6 0.7 -0.1 1.2 2.2 3.4 -16.8 11.6 -3.3 9.2 7.6 -5.1 52 5.2 1.7 1.4 8.9 Q2 3.5 3.3 2.0 1.2 0.2 1.5 9.0 12.0 8.0 1.0 10.0 1.0 0.5 59 3.9 2.4 1.9 9.0 2011 Q3 4.0 4.1 3.8 0.2 -0.1 3.5 9.2 4.0 11.0 12.0 11.0 7.5 1.2 56 1.1 1.7 1.4 8.8 Q4 4.0 4.4 4.1 0.2 -0.4 3.5 11.5 4.0 14.0 12.0 11.0 7.5 1.5 43 1.1 1.5 1.2 8.6

CALENDAR AVERAGE
2010 2.9 1.4 1.9 -0.5 1.4 1.7 5.7 -13.7 15.3 -3.0 11.7 12.6 1.0 63 1.6 1.0 1.3 9.6 -1294 -9.2 2011 2.9 3.0 2.5 0.4 -0.1 2.7 8.1 -0.8 11.4 -0.5 9.3 4.6 -0.6 53 2.9 1.5 1.2 8.8 -1350 -8.9 2012 3.9 3.9 3.4 0.3 0.0 3.3 8.2 4.9 9.3 13.6 11.3 7.1 0.5 55 1.9 1.9 1.8 8.1 -1050 -6.5 2010 2.8 2.4 2.9 -0.6 -0.3 2.6 10.6 -4.0 16.9 -4.6 8.9 10.9 1.1 16 1.3 0.7 0.8 9.6

Q4/Q4 2011 3.3 3.1 2.6 0.4 0.2 2.7 8.2 0.2 11.1 5.6 10.3 5.8 -0.5 43 2.8 1.8 1.5 8.6 2012 3.9 3.8 3.4 0.3 0.1 3.4 7.4 4.7 8.2 16.0 11.5 7.5 0.0 56 2.1 2.0 1.7 7.8

End of year 0.13 1.5 3.9 1.5 2.5 4.2

Source: Bureau of Economic Analysis, Bureau of Labor Statistics, US Treasury, Federal Reserve Board, and MF Global

FORECAST SUMMARY We believe much of the weakness in real GDP in Q1 reflected volatility and weather effects rather than a weaker trend, with payback likely in Q2; we forecast a 3.5% annual rate for Q2 following 1.8% in Q1. The net result is a 2.7% first-half average, weaker than data were suggesting as the year began, with much of the setback likely due to the Q1 spike in energy costs and supply chain effects stemming from the crisis in Japan. We still forecast a 4.0% pace in the second half of this year, although recent data clearly suggest downside risk. Real GDP growth averaged 2.9% at an annual rate in the first year and a half of the recovery (through 10Q4). Prior to the latest data, employment growth appeared to be picking up significantly in 2011. We expect momentum to pick up again soon, consistent with at least a gradual downtrend in the unemployment rate. Although the unemployment rate rose in April

and May, the 9.1% level in May was down from 9.6%, on average, in 10Q4. While we believe ample slack will keep inflation fairly tame, even core inflation now appears to be edging up again. We expect the pace in the core PCE price index to move up from 0.8% in 2010 to 1.5% in 2011 and 1.7% in 2012 (Q4/Q4). Overall inflation will likely be higher than core inflation this year, due to a net rise in food and energy prices. A still-high (but declining) unemployment rate and tame inflation will likely allow the Fed to be patient in unwinding stimulus; we forecast a still-low 1.5% funds rate at the end of 2012, with the first increase in Q1 of 2012. Some tightening in 2012 will likely also come via Fed balance sheet shrinkage; we expect Fed officials to complete the $600 billion asset purchase program and then hold the balance sheet constant in 11H2. We expect Treasury yields will rise, with 10year yields up to 3.9% at the end of 2011 and 4.2% at the end of 2012.

Economic Analysis | US 6/17/2011 | MACRO FOR MARKETS

DATA PREVIEW
WEEKLY STORE SALES (TUE, JUN 21, 07:45/08:55)
MAY 28 WEEKLY ICSC, %w/w, sa WEEKLY ICSC, %y/y REDBOOK, %y/y 0.4 2.8 3.6 APR WEEKLY ICSC, %m/m, sa REDBOOK, %m/m, sa MONTHLY ICSC, %m/m, sa WEEKLY ICSC, %y/y REDBOOK, %y/y MONTHLY ICSC, %y/y 2.5 1.3 0.3 3.0 5.1 8.5 JUN 4 0.4 2.5 4.2 MAY -2.3 -2.7 -2.6 3.0 3.9 5.4 2.5 3.7 JUN 11 -0.8 2.4 3.2 JUN THRU 11 -0.7 0.8 JUN THRU 18 JUN 18

Existing home sales have been exceptionally volatile during the last two years, likely reflecting tax credit and weather effects. The net result has been a near-flat trend: sales totaled 4.9 million in 2008, 5.1 million in 2009, and 4.9 million in 2010.
index, sa 130 118 106 94 82 70 01 02 03 04 05 06 07 08 09 10 11 12 Apr 000s, saar 7350 6620 5890 5160 4430 3700

PHSI (l)
Source: National Association of Realtors

Existing home sales (r)

Note: monthly data are based on the retail industry's fiscal calendar, the fiscal month of June ends on July 2. Source: International Council of Shopping Centers, Instinet, and MF Global

MORTGAGE APPLICATIONS (WED, JUN 22, 07:00)

The weekly store sales indexes have been mixed so far in June, providing no clear signal. (The Redbook index is up at a 0.8% m/m pace, while the ICSC index is down at a 0.7% m/m pace.) The indexes were weaker than the comparable retail sales data in May.
EXISTING HOME SALES (THU, JUNE 21, 10:00)
MAY EST FEB TOTAL (000s, saar) %m/m %y/y MONTHS' SUPPLY MEDIAN PRICE (%y/y) 4920 -8.9 -2.0 8.5 -5.2 MAR 5090 3.5 -6.4 8.3 -5.8 APR 5050 -0.8 -12.9 9.2 -5.0 CONS 4800 -5.0 MF 4900 -3.0 -13.7

MBA indexes

PURCHASE INDEX WKLY 4-WK AVG 189.4 191.6 188.6 189.2

REFI INDEX WKLY 2591.7 2442.9 2475.7 2883.7 4-WK AVG 2377.7 2468.0 2519.6 2598.5

30-YEAR MORTGAGE RATE % 4.69 4.58 4.54 4.51

MAY 20 MAY 27 JUN 3 JUN 10 JUN 17

191.4 191.4 182.9 191.1

Source: Mortgage Bankers' Association

The purchase index continues to show little net change, consistent with a near-flat trend in home sales. At 189.2, the latest four-week average is virtually unchanged from 191.9, on average, in Q4, although it is up a little from 186.4 in Q1.
FHFA HOUSE PRICE INDEX (WED, JUN 22, 10:00)
APR EST JAN PURCHASE-ONLY INDEX FEB MAR CONS MF

Source: National Association of Realtors, Bloomberg, and MF Global

Existing home sales probably fell again in May, even if the plunge in the pending home sales index in April (-11.6% m/m) overstated weakness. Despite the likely decline, the trend in sales continues to look close to flat (at a low level). Our 4.900 million-unit-pace forecast for May is virtually identical to the 4.908 million total for 2010. The level is still down sharply from the annual peak of 7.076 million in 2005. Moreover, post-2007 data are likely to be revised down later this year to account for apparent double-counting. The expected revision will likely not affect the most recent trajectory significantlyjust the levels.
%m/m, sa %m/m, nsa %y/y

-1.2 -1.5 -4.9

-1.5 -0.9 -5.5

-0.3 0.0 -5.9

-0.3

0.0 0.6 -5.8

Source: Federal Housing Finance Agency, Bloomberg, and MF Global

Home price indexes may be stabilizing after a several months of declines. That pattern has been suggested by already released CoreLogic and Radar index data for March.

Economic Analysis | US 6/17/2011 | MACRO FOR MARKETS

Home prices have weakened again recently, although net changes since mid-2009 have generally been modest. Data already available for April suggest weakening may be ending.
index, June 2006 = 100 105 94 83 Mar/Apr* 72 61 06 07 08 09 10 11 FHFA house price index (purchase only, sa) S&P/Case Shiller index (composite 20, sa) CoreLogic home price index (nsa) Radar Logic house price index (nsa)

FOMC STATEMENT AND PRESS BRIEFING (WED, JUNE 22, 12:30 & 14:15)
Fed officials central tendency projections; %Q4/Q4, sa, unless noted REAL GDP NOV 10 JAN 11 APR 11 UNEMPL. RATE (Q4 level, %, sa) NOV 10 JAN 11 APR 11 PCE INFLATION NOV 10 JAN 11 APR 11 CORE PCE INFLATION NOV 10 JAN 11 APR 11 1.0-1.1 NA NA 0.9-1.6 1.0-1.3 1.3-1.6 1.0-1.6 1.0-1.5 1.3-1.8 1.1-2.0 1.2-2.0 1.4-2.0 1.2-1.4 NA NA 1.1-1.7 1.3-1.7 2.1-2.8 1.1-1.8 1.0-1.9 1.2-2.0 1.2-2.0 1.2-2.0 1.4-2.0 1.6-2.0 1.6-2.0 1.7-2.0 9.5-9.7 NA NA 8.9-9.1 8.8-9.0 8.4-8.7 7.7-8.2 7.6-8.1 7.6-7.9 6.9-7.4 6.8-7.2 6.8-7.2 5.0-6.0 5.0-6.0 5.2-5.6 2.4-2.5 NA NA 3.0-3.6 3.4-3.9 3.1-3.3 3.6-4.5 3.5-4.4 3.5-4.2 3.5-4.6 3.7-4.6 3.5-4.3 2.5-2.8 2.5-2.8 2.5-2.8 2010 2011 2012 2013 LONGER RUN

*FHFA and S&P/Case Shiller through March; Radar Logic through mid-April; CoreLogic through April. Source: CoreLogic, Federal Housing Finance Agency, Standard & Poor's, Fiserve, MacroMarkets LLC, and Radar Logic

The weakening in home prices recently has been concentrated in distressed-sale homes.
index, January 2000=100, nsa 210 190 170 150 130 05 06 07 08 09 10 11 12 CoreLogic home price index: total CoreLogic home price index: excluding distressed sales
Source: CoreLogic

MEMO: MF FORECASTS REAL GDP UNEMP. RATE (Q4 level, %, sa) CORE PCE INFLATION 2.8* 9.6* 0.8* 3.3 8.6 1.5 3.9 7.8 1.7

*Already reported. Source: Federal Reserve and MF Global

Apr

Updated economic projections from Fed officials are expected to be released at 2:15 pm on June 22, coinciding with the start of the chairmans post-meeting press briefing. The FOMC statement is scheduled to be released around 12:30 pm. (See page 2 for more.) The updated projections will likely include a lowering of expected real GDP growth in 2011 (from 3.1-3.3% in April, based on the central tendency projections), along with a slight raising of the projected unemployment rate in 11Q4 (from 8.4-8.7%). The 2012 growth projections could also be lowered slightly, consistent with officials viewing the weaker than expected data recently as indicative of a weaker than expected underlying trend and not just short-term factors. Such changes would reinforce the impression that Fed officials are in no rush to start withdrawing stimulus. We do not expect any significant change to the inflation projections this time.

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Economic Analysis | US 6/17/2011 | MACRO FOR MARKETS

JOBLESS CLAIMS (THU, JUN 23, 08:30)

NEW CLAIMS (000s, sa) WKLY MAY 14*** MAY 21 MAY 28 JUN 4 JUN 11 JUN 18*** CONS MF 414 429 426 430 414 412 415 4-WK AVG 440 440 427 425 425 421 421 CONTINUING CLAIMS (000s) REGULAR sa 3718 3747 3696 3675 EXTENDED* nsa 4043 4000 3885 sa** 4238 4268 4191 TOTAL sa** 7956 8015 7887

New home sales probably reversed the rise in last months report, consistent with the underlying trend being no better than flat. Indeed, the early-June homebuilder survey suggested net weakening. Sales averaged a 296,000-unit annual rate in Q1, identical to the pace in the second half of 2010.
MONETARY AGGREGATES (THU, JUN 23, 16:30)
MAY 23 M1 (billions of $, saar) %ch from 13 weeks ago, saar %y/y M2 (billions of $, saar) %ch from 13 weeks ago, saar %y/y Source: Federal Reserve Board 1939 13.7 14.0 9005 5.1 5.1 MAY 30 1961 13.4 14.7 9018 4.9 5.0 JUN 6 1939 15.7 13.5 9026 4.8 5.2 JUN 13

*Sum of federal extended and emergency claims **Using seasonal factors for regular continuing claims ***Sample week for employment report Source: Department of Labor, Bloomberg, and MF Global

Jobless claims are down from as high as 478,000 in late April, but still up from just below 400,000 in March. The pattern suggests net weakening, albeit not nearly to the degree implied by the May employment report. Claims remain important to watch. Some, but not all, of the recent spike in claims has been reversed.
670 570 470 Jun 11 370 270 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 4-week average
Source: Department of Labor and MF Global

At 5.2%, the y/y change in M2 is up from 4.3% in Q1 and 2.3% in all of 2010.
FED BALANCE SHEET (THU, JUN 23, 16:30)
billions of dollars unless noted, nsa TOTAL FED ASSETS %y/y SECURITIES HELD OUTRIGHT US TREASURIES FEDERAL AGENCY MORTGAGE-BACKED OTHER LOANS PRIMARY CREDIT TALF MAIDEN LANE LLC (I*, II**, & III***) CENTRAL BANK LIQY SWAPS OTHER ASSETS JUN 1 2793 19.4 2569 1532 119 918 14 0 14 64 0 146 2601 29.3 JUN 8 2815 20.6 2592 1555 119 918 13 0 13 62 0 149 2665 32.9 JUN 15 2832 20.6 2609 1576 118 915 13 0 13 61 0 149 2665 32.9 JUN 22

initial claims, 000s , sawr

Weekly

NEW HOME SALES (THU, JUN 23, 10:00)

MAY EST FEB NEW HOME SALES (000s, saar) %m/m %y/y MONTHS' SUPPLY MEDIAN PRICE (%y/y) 278 -10.3 -19.2 7.9 -1.8 MAR 301 8.3 -21.8 7.2 -4.6 APR 323 7.3 -23.1 6.5 4.6 CONS 310 -4.0 MF 295 -8.7 5.0

MONETARY BASE (2-wk avg)

% y/y

* Bear Stearns assets. ** AIG CDO assets. *** RMBS assets. Source: Federal Reserve Board

The Feds $600 billion purchase plan will likely boost total Fed assets to around $2.875 trillion.

Source: Census Bureau, Bloomberg, and MF Global

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Economic Analysis | US 6/17/2011 | MACRO FOR MARKETS

DURABLE GOODS (FRI, JUN 24, 08:30)

MAY EST FEB TOTAL ORDERS (%m/m, sa) EX TRANSPORTATION EX DEFENSE EX CIVILIAN AIR & DEFENSE NONDEF. CAPITAL GOODS EX AIRCRAFT TOTAL SHIPMENTS (%m/m, sa) NONDEF. CAP GOODS EX AIR INVENTORIES (%m/m, sa) INVENTORY-TO-SALES RATIO -1.1 -0.6 0.6 -1.0 4.8 -0.1 0.0 -0.2 1.2 1.32 MAR 4.6 2.6 4.2 4.3 5.0 5.4 3.1 3.7 1.7 1.30 APR -3.6 -1.6 -3.8 -2.2 -7.1 -2.3 -1.3 -1.5 0.9 1.32 1.1 2.0 CONS 1.6 1.0 MF

GDP (FRI, JUN 24, 08:30)

11Q1 3RD EST

% q/q, saar, unless noted 1.7 1.0 1.7 0.8 REAL GDP FINAL SALES DOMESTIC FINAL SALES NET EXP. (contr. % pts.) INVENTORIES (contr. % pts.) INVENTORIES (ch, bil saar) CONSUMPTION BUSINESS FIXED INVEST STRUCTURES EQUIP & SOFTWARE RESIDENTIAL INVESTMENT EXPORTS IMPORTS GOVERNMENT FEDERAL STATE & LOCAL

10Q3

10Q4

11Q1 2ND EST

CONS

MF

2.6 0.9 2.6 -1.7 1.6 121 2.4 10.0 -3.6 15.4 -27.3 6.7 16.8 3.9 8.8 0.7 4.6 2.1 0.5 3.2 4.5 1.2 1.2 6.0 3.5 2.9
10Q3

3.1 6.7 3.2 3.3 -3.4 16 4.0 7.7 7.7 7.7 3.3 8.6 -12.6 -1.7 -0.3 -2.6 3.5 0.4 0.4 2.8 4.2 1.3 0.8 5.4 1.7 3.0
10Q4

1.8 0.6 0.7 -0.1 1.2 52 2.2 3.4 -16.8 11.6 -3.3 9.2 7.6 -5.1 -7.9 -3.2 3.8 1.9 1.4 2.3 3.9 1.6 0.9 5.1 3.3 3.7
11Q1

1.9

2.3 0.9 0.7 0.1 1.4 58

2.2

2.2

Source: Census Bureau, Bloomberg, and MF Global

Durable goods orders have alternated between up and down for 10 consecutive months. The streak probably continued in May (with a rise). On balance, the rate of growth in orders appears to have slowed in recent months. Orders for nondefense capital goods excluding aircraft have tended to be weak in the first month of each quarter recently, followed by a rebound in the next two months. Consistent with that pattern, we forecast a solid rise in May.
orders for nondefense capital goods ex air, $bil, samr 70 66 62 58 54 50 46 05 06 07 08 09 10 11 Apr

NOMINAL GDP CHAIN PRICE INDEX CORE PCE PRICE INDEX REAL GDP (%y/y) NOMINAL GDP (%y/y) CHAIN PRICE INDEX (%y/y) CORE PCE PRICES (%y/y) PERSONAL SAVING RATE (%) NOM WAGE INCOME (%y/y)

4.3 1.9 1.4 1.9 1.4 2.4 4.0 1.6 0.9 5.1

REAL GDI* (%q/q, saar) (%y/y) BOOK PROFITS, AFTER TAX (%q/q, saqr)

1.2 3.7 2.4 27.2 1.6 26.4

3.9 3.0 -3.3 11.4 2.3 18.3

1.2 2.2 5.9 5.8 1.3 8.5

3-month average

Monthly

Source: Census Bureau

(%y/y) PROFITS FROM CURRENT PRODUCTION, PRE-TAX (%q/q, saqr) (%y/y)

*Nominal GDI deflated by MF Global using GDP price index Source: Bureau of Economic Analysis, Bloomberg, and MF Global

The Q1 growth rate will probably be revised up, mainly reflecting new data on foreign trade and inventories.

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Economic Analysis | US 6/17/2011 | MACRO FOR MARKETS

June 13July 8
MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY

13
(09:30) Richmond Feds Lacker (11:00) 4-wk Bill Announcement (11:00) Fed purchase op (11:30) 3- & 6-mth Bill Auction (19:00) Dallas Feds Fisher

14
(07:30) May NFIB (07:45/08:55) Store Sales (08:30) May PPI (08:30) May Retail Sales (10:00) Apr Inventories (11:00) Fed purchase op (11:30) 4-wk Bill Auction (15:30) Fed Chairman Bernanke speaks on fiscal sustainability, in Washington (text, no Q&A)

15
(07:00) Mortgage Apps (08:30) May CPI (08:30) Jun NY Fed (09:00) Apr TICS (09:15) May Indust Prod (10:00) Jun NAHB HMI (11:00) Fed purchase op

16
(08:30) Initial Claims (08:30) May Starts/Permits (08:30) Q1 Current Account, including annual revision (10:00) Jun Phil Fed (11:00) 3- & 6-mth Bill & 30-yr (r) TIPS Announcement (11:00) Fed purchase op (13:10) Dallas Feds Fisher (16:30) Fed Bal Sheet/Money

17
(09:55) Jun prelim Michigan (10:00) May Lead Ind (11:00) Fed TIPS purchase op

20
(11:00) 4-wk Bill Announcement (11:00) Fed purchase op (11:30) 3- & 6-mth Bill Auction (14:00) Fed purchase op

21
(07:45/08:55) Store Sales (10:00) May Exist Home Sales 4900Ke/-3.0%m/m (11:00) Fed purchase op (11:30) 4-wk Bill Auction

22
(07:00) Mortgage Apps (10:00) CBO releases 2011 Long-Term Budget Outlook (10:00) Apr FHFA 0.0%e (12:30) FOMC Statement (14:15) Fed Chairman Bernanke to hold post-FOMC meeting press briefing

23
(08:30) Initial Claims 415Ke (10:00) May New Home Sales 295Ke/-8.7%m/m (11:00) 3- & 6-mth, & 1-yr Bill, 2-yr, 5-yr & 7-yr Note Announcement (11:00) Fed purchase op (13:00) 30-yr (r) TIPS auction (16:30) Fed Bal Sheet/Money (19:00) Chicago Feds Evans

24
(08:30) May Durables 1.7%e Ex trans 1.0%e (08:30) Q1 GDP (3rd est) 2.3%e (11:00) Fed purchase op

27
(08:30) May Personal Income (10:30) Jun Texas Mfg. (11:00) Minneapolis Feds Kocherlakota (11:00) 4-wk Bill Announcement (11:00) Fed purchase op (11:30) 3- & 6-mth Bill Auction (13:00) 2-yr Note Auction (13:00) KC Feds Hoenig

28
(07:45/08:55) Store Sales (09:00) Apr S&P/CS (10:00) Jun Conf. Board (10:00) Jun Richmond Fed (11:00) Fed purchase op (11:30) 4-wk & 1-yr Bill Auction (12:00) Dallas Feds Fisher (13:00) 5-yr Note Auction

29
(07:00) Mortgage Apps (10:00) May PHSI (10:00) Jun Help Wanted (11:00) Fed purchase op (13:00) 7-yr Note Auction

30
(08:30) Initial Claims (09:00) St. Louis Feds Bullard (09:45) Jun Chicago PMI (10:00) Jun Milwaukee Fed (11:00) Jun KC Fed (11:00) 3- & 6-mth Bill Announcement (11:00) Fed purchase op (13:00) KC Feds Hoenig

1
(09:55) Jun Michigan (10:00) May Construction (10:00) Jun Mfg ISM Jun Lt Vehicle Sales

4
Independence Day Markets closed

5
(10:00) May Factory Orders (11:00) 4-wk Bill Announcement (11:30) 3- & 6-mth Bill Auction

6
(07:00) Mortgage Apps (07:45/08:55) Store Sales (08:30) Jun NonMfg ISM (11:00) Fed purchase op (11:30) 4-wk Bill Auction

7
(08:15) June ADP (08:30) Initial Claims (11:00) 3- & 6-mth Bill, 3-yr, 10yr (r) Note, & 30-yr (r) Bond Announcement (12:30) KC Feds Hoenig Jun Chain Store Sales

8
(08:30) Jun Employment (15:00) May Consumer Credit

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