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Market Commentary


 
Today's Coupons
 
  10-Year Notes   99-18 (-10.5)  
 
  FN 3.5% Coupon   100-07.5 (-05)  
 
  Support   3.237%  
 
  Resistance   2.622%  
 
 
 
 
Wednesday, February 27, 2019
 
 
Treasury Yields Rise as Investors Await Fed Chair Powell’s Testimony
 
 
Market opened today’s session with treasuries slightly inching lower across all maturities. 10-Year treasury yield is at 2.6752, 3.95 bps increased from prior closing of 2.6357.

US stock futures slightly fell this morning, led by declines in health care and information technology sectors. Stocks also struggled as geopolitical events kept investors on edge. The conflict between India and Pakistan intensified after Pakistan said it shot down two Indian jets. The worst escalation between the two nations since a war in 1971 weakened Indian Rupee and led to the suspension of commercial flights in the area. Also in Asia, a second summit between President Trump and North Korean leader Kim Jung Un got underway in Vietnam as the US leader sought to advance nuclear talks. In the stateside, the second half of Fed Chair Powell’s semiannual testimony continues today before the House Financial Services Committee although yesterday, he only reiterated Fed’s “patient” stance from the January meeting and hinted a potential end to balance normalization later this year as suggested by other Fed officials over the past couple weeks.

MBA Mortgage Applications Index rose 5.30% last week after rising 3.60% in prior. Both purchases and refinances increased 6.10% and 4.60% after rising 1.70% and 6.40% in prior, respectively. Wholesale Inventories in December rose 1.10% vs. 0.40% consensus. Pending Home Sales in January rose 4.60% from a 2.30% decline in revised prior vs. a 1.00% increase consensus as it shook off concerns in housing market added by the low reading of housing starts from yesterday. Factory Orders increased 0.10% in December from -0.50% revised prior. Lastly, both the headline Durable Goods Orders and the core in December came in line with prior readings of 1.20% and 0.10%, respectively.

The curve has bear-steepened with UST 10-Year yield up 3.95 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  02/25 Chicago Fed Nat Activity Index 05:30 Jan 0.10 -0.43 0.27 0.05  
                   
  02/25 Wholesale Inventories MoM 07:00 Dec P 0.40% 1.10% 0.30% 0.40%  
                   
  02/25 Wholesale Trade Sales MoM 07:00 Dec -0.30% -1.00% -0.60% -1.20%  
                   
  02/25 Dallas Fed Manf. Activity 07:30 Feb 4.70 13.10 1.00 -  
                   
  02/26 Housing Starts 05:30 Dec 1256k 1078K 1256k 1214K  
                   
  02/26 Building Permits 05:30 Dec 1290k 1326K 1328k 1322k  
                   
  02/26 Housing Starts MoM 05:30 Dec -0.10% -11.20% 3.20% 0.40%  
                   
  02/26 Building Permits MoM 05:30 Dec -2.60% 0.30% 5.00% 4.50%  
                   
  02/26 FHFA House Price Index MoM 06:00 Dec 0.40% 0.30% 0.40% -  
                   
  02/26 S&P CoreLogic CS 20-City MoM SA 06:00 Dec 0.30% 0.19% 0.30% 0.25%  
                   
  02/26 S&P CoreLogic CS 20-City YoY NSA 06:00 Dec 4.50% 4.18% 4.68% 4.58%  
                   
  02/26 Richmond Fed Manufact. Index 07:00 Feb 5.00 16.00 -2.00 -  
                   
  02/27 MBA Mortgage Applications 04:00 22 Feb - 5.30% 3.60% -  
                   
  02/27 Wholesale Inventories MoM 05:30 Dec F 0.40% 1.10% 1.10% -  
                   
  02/27 Durable Goods Orders 07:00 Dec F - 1.20% 1.20% -  
                   
  02/27 Durables Ex Transportation 07:00 Dec F - 0.10% 0.10% -  
                   
  02/27 Pending Home Sales MoM 07:00 Jan 1.00% 4.60% -2.20% -2.30%  
                   
  02/27 Pending Home Sales NSA YoY 07:00 Jan -4.60% -3.20% -9.50% -  
                   
  02/28 Initial Jobless Claims 05:30 23 Feb 220k - 216k -  
                   
  02/28 Continuing Claims 05:30 16 Feb 1737k - 1725k -  
                   
  02/28 GDP Annualized QoQ 05:30 4Q A 2.30% - 3.40% -  
                   
  02/28 Core PCE QoQ 05:30 4Q A 1.60% - 1.60% -  
                   
  02/28 Personal Consumption 05:30 4Q A 3.00% - 3.50% -  
                   
  02/28 GDP Price Index 05:30 4Q A 1.70% - 1.80% -  
                   
  02/28 Bloomberg Consumer Comfort 06:45 24 Feb - - 59.60 -  
                   
  02/28 Kansas City Fed Manf. Activity 08:00 Feb 6.00 - 5.00 -  
                   
  03/01 Personal Income 05:30 Jan 0.30% - - -  
                   
  03/01 Personal Spending 05:30 Dec -0.20% - 0.40% -  
                   
  03/01 PCE Deflator MoM 05:30 Dec 0.00% - 0.10% -  
                   
  03/01 PCE Deflator YoY 05:30 Dec 1.70% - 1.80% -  
                   
  03/01 PCE Core MoM 05:30 Dec 0.20% - 0.10% -  
                   
  03/01 PCE Core YoY 05:30 Dec 1.90% - 1.90% -  
                   
  03/01 U. of Mich. Sentiment 07:00 Feb F 95.80 - 95.50 -  
                   
 
 
 
 
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