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Market Commentary


 
Today's Coupons
 
  10-Year Notes   104-02.5 (+08)  
 
  FN 3.5% Coupon   100-14.5 (+07)  
 
  Support   3.237%  
 
  Resistance   2.543%  
 
 
 
 
Friday, February 01, 2019
 
 
Market opened today’s session with treasuries selling-off across all maturities. 10-Year treasury yield is at 2.6806, 5.13 bps increased from prior closing of 2.6293.

US equity futures pointed to a higher open today with both treasuries and the dollar falling after the payroll number came in unexpectedly high, signaling the labor market remained robust. US equities scored the best month in more than three years in January as the Fed plans to dial back on gradual rate hikes. Yesterday, Amazon reported stronger earnings and revenue but downplayed revenue guidance which put a damper on optimism. In Washington, while there hasn’t been any announcement of a breakthrough after the trade negotiations, both sides cited progress and agreed to strengthen cooperation. The US representatives will visit Beijing in mid-February for the next round of talks before the truce expiration on March 1st.

Nonfarm payrolls posted robust job gains as it surged 304k from 222k revised prior vs. 165k consensus. The 35-day government shutdown did not hinder the soundness of current labor market as many suspected before the data. Unemployment rate slightly rose to 4.00% from 3.90% prior and consensus. Markit US Manufacturing PMI came in line with both consensus and prior of 54.90. Majority of economic data released today at 7:00 AM (PT) indicated that impacts from the government shutdown were very minimal as ISM Manufacturing jumped to 56.60 from 54.30 revised prior vs. 54.00 consensus and University of Michigan Consumer Sentiment Index rose to 91.20 from 90.70 prior and consensus. Construction Spending in November also rose 0.80% from 0.10% revised prior vs. 0.20% consensus and lastly, Wholesale Inventories in November fell 0.30% from 0.90% revised prior vs. 0.50% estimate. Treasuries slid even further from a dip in the early morning after these data were released.

The curve has bear-flattened with UST 10-Year yield up 5.13 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  01/28 Chicago Fed Nat Activity Index 05:30 Dec - 0.27 0.22 0.21  
                   
  01/28 Dallas Fed Manf. Activity 07:30 Jan -2.70 1.00 -5.10 -  
                   
  01/29 S&P CoreLogic CS 20-City YoY NSA 06:00 Nov 4.89% 4.68% 5.03% 5.02%  
                   
  01/29 S&P CoreLogic CS 20-City MoM SA 06:00 Nov 0.40% 0.30% 0.41% 0.42%  
                   
  01/30 MBA Mortgage Applications 04:00 25 Jan - -3.00% -2.70% -
                 
  01/30 ADP Employment Change 05:15 Jan 181k 213k 271k 263k  
                   
  01/30 Pending Home Sales MoM 07:00 Dec 0.50% -2.20% -0.70% -0.90%  
                   
  01/30 Pending Home Sales NSA YoY 07:00 Dec -7.00% -9.50% -7.70% -7.80%  
                   
  01/30 FOMC Rate Decision (Upper Bound) 11:00 30 Jan 2.50% - 2.50% -  
                   
  01/30 FOMC Rate Decision (Lower Bound) 11:00 30 Jan 2.25% - 2.25% -  
                   
  01/31 Challenger Job Cuts YoY 04:30 Jan - 18.70% 35.30% -  
                   
  01/31 Initial Jobless Claims 05:30 26 Jan 215k 253k 199k 200k  
                   
  01/31 Continuing Claims 05:30 19 Jan 1721k 1782k 1713k -  
                   
  01/31 Bloomberg Consumer Comfort 06:45 27 Jan - 57.40 57.40 -  
                   
  02/01 Change in Nonfarm Payrolls 05:30 Jan 165k 304k 312k 222k  
                   
  02/01 Unemployment Rate 05:30 Jan 3.90% 4.00% 3.90% -  
                   
  02/01 Average Hourly Earnings MoM 05:30 Jan 0.30% 0.10% 0.40% -  
                   
  02/01 Average Hourly Earnings YoY 05:30 Jan 3.20% 3.20% 3.20% 3.30%  
                   
  02/01 Labor Force Participation Rate 05:30 Jan 63.00% 63.20% 63.10% -  
                   
  02/01 Markit US Manufacturing PMI 06:45 Jan P 54.90 54.90 54.90 -  
                   
  02/01 U. of Mich. Sentiment 07:00 Jan F 90.70 91.20 90.70 -  
                   
 
 
 
 
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