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Market Commentary


 
Today's Coupons
 
  10-Year Notes   99-15 (-10.5)  
 
  FN 3.5% Coupon   100-05.5 (-05)  
 
  Support   3.237%  
 
  Resistance   2.622%  
 
 
 
 
Thursday, February 21, 2019
 
 
Treasury Yields Increase after Disappointing Economic Data
 
 
Market opened today’s session with treasuries selling-off across all maturities. 10-Year treasury yield is at 2.6860, 4.13 bps increased from prior closing of 2.6447.

China proposed to buy an additional $30 billion of US agricultural products a year as part of a deal that the two countries are currently working on in Washington this week. The US and China have started drawing up multiple memorandums of understanding over trade that would outline the basis of a final deal, marking the most significant progress toward an ending of the trade war. Chinese Vice Preimer Liu He is scheduled to meet with President Trump tomorrow which raised speculation that there might be an extension to the March deadline. Despite of the perceived progress in the trade negotiations, US stocks started today’s session in red, largely affected by economic data posted today. Treasuries edged lower and WTI crude also fell below $57 a barrel this morning. Yesterday, St. Louis Fed President Bullard added to the ongoing consensus of other Fed officials on an ending to its balance sheet normalization. While acknowledging his stance is in the minority on the FOMC, the voting member said current rates are too high.

The February Philadelphia Fed Business Outlook declined to -4.10 from 17.00 prior, marketing the lowest reading since May 2016. Initial Jobless Claims dropped to 216k from 239k prior vs. 228k consensus. Continuing Claims also fell to 1725k from 1780k revised prior vs. 1743k estimate. Primarily affected by the ongoing trade war, Durable Goods Orders in December came in below expectation of 1.70% at 1.20%. Bloomberg Consumer Comfort remained strong at 59.60 vs. 60.00 prior. Markit US Manufacturing PMI in February printed a slightly disappointing reading of 53.70 vs. 54.90 prior, marking the lowest reading since September 2017. Leading Index declined to -0.10% from flat revised prior. Lastly, Existing Home Sales fell to the slowest pace since November 2015 to 4.94 million. The US Treasury is scheduled to auction off $8 Billion of 30-Year TIPS at 10:00 AM (PT) today.

The curve has bear-steepened with UST 10-Year yield up 4.13 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  02/18 No Data - - - - - -  
                   
  02/19 NAHB Housing Market Index 07:00 Feb 59.00 62.00 58.00 -  
                   
  02/20 MBA Mortgage Applications 04:00 15 Feb - 3.60% -3.70% -6.90%  
                   
  02/20 FOMC Meeting Minutes 11:00 30 Jan - - - -  
                   
  02/21 Philadelphia Fed Business Outlook 05:30 Feb 14.00 -4.10 17.00 -  
                   
  02/21 Initial Jobless Claims 05:30 16 Feb 228k 216k 239k -  
                   
  02/21 Continuing Claims 05:30 9 Feb 1743k 1725k 1773k 1780k  
                   
  02/21 Durable Goods Orders 05:30 Dec P 1.70% 1.20% 0.70% 1.00%  
                   
  02/21 Durables Ex Transportation 05:30 Dec P 0.30% 0.10% -0.40% -0.20%  
                   
  02/21 Bloomberg Consumer Comfort 06:45 17 Feb - 59.60 60.00 -  
                   
  02/21 Markit US Manufacturing PMI 06:45 Feb P 54.80 53.70 54.90 -  
                   
  02/21 Markit US Services PMI 06:45 Feb P 54.30 56.20 54.20 -  
                   
  02/21 Markit US Composite PMI 06:45 Feb P - 55.80 54.40 -  
                   
  02/21 Leading Index 05:30 Jan 0.10% -0.10% -0.10% 0.00%  
                   
  02/21 Existing Home Sales 07:00 Jan 5.00m 4.94m 4.99m 5.00m  
                   
  02/21 Existing Home Sales MoM 07:00 Jan 0.20% -1.20% -6.40% -4.00%  
                   
  02/22 No Data - - - - - -  
                   
 
 
 
 
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