This week we saw mixed economic results, data suggesting inventory constraints, and optimism about potential future rate cuts, with next week promising key economic events we’ll be watching with potential future rate cuts in mind. Let’s dive into the details to break it all down.

The US bond markets experienced mixed results this week, initially reacting with a sell-off on Monday morning following an attempted assassination of former President Trump, but later recovering those losses throughout the week. Wednesday's Housing Starts and Building Permits Reports highlighted significant month-over-month improvements, particularly in multi-family dwellings, while single-family starts and permits declined, suggesting ongoing inventory constraints. Despite the drop in single-family starts, this divergence with multi-family starts might indicate builder optimism about potential future rate cuts.

On Thursday, Initial Jobless Claims and Continuing Claims Reports showed a sharp increase after unexpectedly low figures the previous week, potentially influenced by reporting issues related to the July 4th holiday weekend. This spike in jobless claims ties with the highest number seen this year, per Bloomberg, signaling a possible shift in the labor market dynamics.

Looking forward, next week promises key economic events like June’s PCE Report, additional Federal Reserve Governor speeches and Personal Income/Spending Reports, all of which could bolster the argument for further interest rate cuts in the near term. Stay tuned to the Market Update for updates on these next week.