ECB cuts again/Claims don't reflect an increase in firing's yet/Philly mfr'g drops sharply/Housing data, old news

Not waiting to see how the trade negotiations play out, the ECB cut rates again by 25 bps to 2.25% as expected and believe that they’ve reached their 2% target on a sustainable basis. They also think they are no longer ‘restrictive’ which considering they are back with real rates of zero, that is certainly the case. While the sole mandate of the ECB is stable prices, it is clear that they are more focused on the slow European economy and the threats to it via trade wars. The dovishness has the euro still lower this morning, though still up a lot over the past month vs the US dollar as we know. European bond yields are down slightly after starting the morning higher while stocks are following the late day US selloff yesterday.

Initial claims for the week ended 4/12 fell to 215k from 224k and that was 10k less than expected. The 4 week average moves to 221k from 223k. Continuing claims totaled 1.885mm, up from 1.844mm and still hovering around November 2021 levels.

Bottom line, at least seen here, no response yet on the firing side in response to the April 2nd news as the pause came on April 9th with regards to the reciprocal slice, ex China. Companies are obviously in wait and see mode but I have to believe on the hiring side, things have slowed down notably and we’ll soon see if the case and to what extent if so.

The April Philly manufacturing index dropped sharply to -26.4 from +12.5 and well under the estimate of +2.2 and follows the negative print seen in the NY regional index. It’s also the worst print in 2 years. New orders plunged to -34.2 from +8.7 and backlogs were -1.1, down slightly m/o/m. Inventories were a touch negative too at -.9. The employment component fell to a hair above zero at .2 and that is a 6 month low while the average workweek dropped to -12.7 from +8.7.

On the pricing side, as all eyes are now on this, prices received rose to 51 from 48.3 and that is the highest since July 2022. Prices received were up about 1 pt to 30.7 which is the 2nd highest print since January 2023.