More statistics pointing to a slowdown in the US economy: September housing starts in the US dropped 5.3% from a month earlier, after a 7.1% gain in August. Starts in the South declined due in part to Hurricane Florence. Building permits dipped 0.6% after a dramatic decline of 5.7% in August. Permits were at their lowest level since May 2017, as multi-family permits decreased 9.3% while single-family authorizations rose 2.9%. Across regions, permits fell in the Midwest (-18.9%) and Northeast (-9.8%) but went up in the West (11.1%) and the South (0.6%).
In addition to the poor housing numbers interest rates are poised to go up, in part because of tighter Fed policies and in part because of a decline in US debt purchases by foreign governments, especially China. Beijing in August had cut its US treasury hoard to $1.165 trillion from $1.171.
Overall foreign holdings of US treasuries in August rose $35.5 billion to $6.287 trillion.
The current political spat between Washington and Riyadh could very well start a major sales event by Saudi Arabia.
10-year treasury yields are above 3%. Under current circumstances they should remain above that level for the time being, despite some bond analysts saying the US economy will not be able to sustain that level. Chances are good, however, that the current international political climate will push US interest rates stull higher.