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Market Commentary


 
Today's Coupons
 
  10-Year Notes   99-08.5 (-06.5)  
 
  FN 3.5% Coupon   100-0.5 (-06)  
 
  Support   3.237%  
 
  Resistance   2.624%  
 
 
 
 
Thursday, February 28, 2019
 
 
Treasury Yields Rise as GDP Growth Offsets Geopolitical Concerns
 
 
Market opened today’s session with treasuries selling-off across all maturities. 10-Year treasury yield is at 2.7059, 2.34 bps increased from prior closing of 2.6825.

The talks between the US and North Korea came to an abrupt end as President Trump walked away after the two sides couldn’t agree on a deal. President Trump was not pleased with Kim’s offer to dismantle their main nuclear facility without giving up their arsenal and other infrastructure while asking to lift the sanctions in their entirety. The president said “sometimes you have to walk” at a news conference in Hanoi. Although the Trump administration pledged to continue negotiations, the outlook is now murky as it’s unclear how North Korea will react to the president walking away. Treasuries rallied on the news but took an about-face after the fourth quarter GDP came in above expectation. In the stateside, Fed Chair Powell told the House Financial Services Committee yesterday that he would soon announce a plan to end the currently ongoing balance sheet normalization.

Initial Jobless Claims came back to a normal range as it printed 225k vs. 217k revised prior and 220k consensus. Continuing Claims also came in above expectation at 1805k vs. 1726k revised prior. The fourth quarter GDP came in at 2.60% vs. 2.20% consensus, relieving looming concerns over slowdown in the economy. Personal Consumption was slightly short of estimate of 3.00% at 2.80%. Chicago Purchasing Manager index in February surged to 64.70 from 56.70 prior vs. 57.50 consensus. Lastly, Bloomberg Consumer Comfort continued to show strength at 61.00 vs. 59.60 prior.

The curve has bear-flattened with UST 10-Year yield up 2.34 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 225k 216k 217k  
                   
  02/28 Continuing Claims 05:30 16 Feb 1737k 1805k 1725k 1726k  
                   
  02/28 GDP Annualized QoQ 05:30 4Q A 2.20% 2.60% 3.40% -  
                   
  02/28 Core PCE QoQ 05:30 4Q A 1.60% 1.70% 1.60% -  
                   
  02/28 Personal Consumption 05:30 4Q A 3.00% 2.80% 3.50% -  
                   
  02/28 GDP Price Index 05:30 4Q A 1.70% 1.80% 1.80% -  
                   
  02/28 Bloomberg Consumer Comfort 06:45 24 Feb - 61.00 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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