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Market Commentary



 
Today's Coupons
 
  10-Year Notes   101-31.5 (+07)  
 
  FN 3.5% Coupon   103-06 (+01)  
 
  Support   2.753%  
 
  Resistance   1.538%  
 
 
 
 
  Friday, January 31, 2020
 
 

Treasury Yields Lower Further on Coronavirus Fear

 
 
Market opened today’s session with treasuries advancing across all maturities. 10-Year Treasury yield is at 1.5375, 4.81 bps decreased from prior closing of 1.5856.

As this tumultuous week wraps up, stocks dropped on the last day of January as concern over the deadly virus in China got heightened after the WHO declared it as a global health emergency yesterday. Their designation was to help the UN health agency mobilize both financial and political support to contain the outbreak. The death toll now reached 213 with the confirmed cases nearing 10,000. In reaction to increasing toll, Delta announced that it will suspend all China flights starting February 6th. In corporate news, Amazon surged as the company’s quarterly profit and revenue easily topped analysts’ estimates and it’s on track to exceed $1 trillion in market value. Meanwhile, Caterpillar slipped after issuing disappointing earnings forecast for 2020. More than 70% of the S&P 500 companies which have reported their results so far have beaten analysts’ estimates. Elsewhere, WTI crude continued to retreat on the deteriorating situation in China, trading below $52 a barrel this morning.

December Personal Income came in below consensus of 0.30% at 0.20%. However, many economists view this reading as a solid wage and salary growth and project that it may even promote an acceleration in consumer spending in the first quarter. Personal Spending came in line with consensus of 0.30% in December, and Employment Cost Index in the fourth quarter remained unchanged at 0.70%. MNI Chicago PMI, however, unexpectedly plunged to 42.90 from a downwardly revised prior of 48.20 vs 48.90 consensus. Lastly, University of Michigan Sentiment slightly edged higher to 99.80 from 99.10 prior.

The curve has bull-flattened with UST 10-Year yield down 4.81 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  01/27 Dallas Fed ManfActivity 07:30 Jan -2.00 -0.20 -3.20 -  
                   
  01/28 Durable Goods Orders 05:30 Dec P 0.30% 2.40% -2.10% -3.10%  
                   
  01/28 Durables Ex Transportation 05:30 Dec P 0.30% -0.10% -0.10% -0.40%  
                   
  01/28 S&P CoreLogic CS 20-City MoM SA 06:00 Nov 0.40% 0.48% 0.43% 0.46%  
                   
  01/28 S&P CoreLogic CS 20-City YoY NSA 06:00 Nov 2.40% 2.55% 2.23% 2.22%  
                   
  01/28 Richmond Fed Manufact. Index 07:00 Jan -3.00 20.00 -5.00 -  
                   
  01/29 MBA Mortgage Applications 04:00 24 Jan - 7.20% -1.20% -  
                   
  01/29 Wholesale Inventories MoM 05:30 Dec P 0.10% -0.10% -0.10% 0.10%  
                   
  01/29 Pending Home Sales MoM 07:00 Dec 0.50% -4.90% 1.20% -  
                   
  01/29 Pending Home Sales NSA YoY 07:00 Dec 10.30% 6.80% 5.60% -  
                   
  01/29 FOMC Rate Decision (Upper Bound) 11:00 29 Jan 1.75% - 1.75% -  
                   
  01/29 FOMC Rate Decision (Lower Bound) 11:00 29 Jan 1.50% - 1.50% -  
                   
  01/30 Personal Consumption 05:30 4Q A 2.00% 1.80% 3.20% -  
                   
  01/30 Initial Jobless Claims 05:30 25 Jan 215k 216k 211k 223k  
                   
  01/30 Continuing Claims 05:30 18 Jan 1730k 1703k 1731k 1747k  
                   
  01/31 Personal Income 05:30 Dec 0.30% 0.20% 0.50% 0.40%  
                   
  01/31 Personal Spending 05:30 Dec 0.30% 0.30% 0.40% -  
                   
  01/31 PCE Deflator MoM 05:30 Dec 0.20% 0.30% 0.20% 0.10%  
                   
  01/31 PCE Deflator YoY 05:30 Dec 1.60% 1.60% 1.50% 1.40%  
                   
  01/31 U. of Mich. Sentiment 07:00 Jan F 99.10 99.80 99.10 -
                   
 
 
 
 
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