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Market Commentary


Monday
March 02, 2015
10-YEAR NOTES   99-22.5 (-05)
2.031%
FN 3.5% COUPON   104-24.5 (+05.5)
SUPPORT   2.40%
RESISTANCE   1.62%
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    This week’s focus is on Nonfarm Payrolls which gets released this Friday. Payroll gains have been firm with the unemployment rate on a downward trend, and we look to Friday’s report to provide further insight to current U.S. labor market conditions. The report is expected to show that the U.S. added an additional 235K jobs in February for the 12th consecutive month above 200K. In today’s data, Personal Income increased $50.8 Billion (+0.3%), Disposable Personal Income (DPI) increased $52.6 Billion (+0.4%), and Personal Consumption Expenditures (PCE) declined $18.9 Billion (-0.2%) in January. In December, personal income increased $45.3 Billion (+0.3%), DPI increased $37.3 Billion (+0.3%), and PCE decreased $35.7 Billion (-0.3%). Wages and salaries increased $42.4 Billion in January, following an $8.6 Billion advance in December. Instead of spending this new found income, household are allocating more toward savings, with the personal savings rate up +5.5% in January vs. 5.0% prior. Inflation remains low, and well below the Fed's 2% target, adding impetus to the argument that the Fed will likely avoid an early rate hike. Treasuries yields rose this morning following today’s data dump pushing yield on the 10-Year note back above the 2% mark. The curve has bull steepened with 2s10s up +2.1 bps.
 
This Week's Events:
 
DATE EVENTS TIME (PST) PERIOD SURVEY ACTUAL PRIOR REVISED
03/02 Personal Income 05:30 January 0.4% 0.3% 0.3% -
03/02 Personal Spending 05:30 January -0.1% -0.2% -0.3% -
03/02 PCE Core MoM 05:30 January 0.1% 0.1% 0.0% -
03/02 PCE Core YoY 05:30 January 1.3% 1.3% 1.3% -
03/02 Markit US Manufacturing PMI 06:45 February F 54.3 55.1 54.3 -
03/02 Construction Spending MoM 07:00 January 0.3% -1.1% 0.4% 0.8%
03/03 ISM New York 06:45 February - - 44.5 -
03/04 MBA Mortgage Applications 04:00 February 27 - - -3.5% -
03/04 ADP Employment Change 05:15 February 220K - 213K -
03/04 Markit US Composite PMI 06:45 February F - - 56.8 -
03/04 Markit US Services PMI 06:45 February F 57.0 - 57.0 -
03/05 Jobless Claims 05:30 February 28 295K - 313K -
03/05 Continuing Claims 05:30 February 21 2395K - 2401K -
03/05 Factory Orders 07:00 January 0.2% - -3.4% -
03/06 Nonfarm Payrolls 05:30 February 235K - 257K -
03/06 Unemployment Rate 05:30 February 5.6% - 5.7% -
03/06 Labor Force Participation Rate 05:30 February - - 62.9% -
03/06 Trade Balance 05:30 January -$41.5 Billion   -$46.6 Billion -
 
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