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Market Commentary


 
Today's Coupons
 
  10-Year Notes   99-12 (+06)  
 
  FN 3.5% Coupon   100-02 (+01)  
 
  Support   3.237%  
 
  Resistance   2.625%  
 
 
 
 
Wednesday, March 06, 2019
 
 
Treasury Yields Lower as US Trade Deficit Widens
 
 
Market opened today’s session with treasuries slightly inching higher across all maturities. 10-Year treasury yield is at 2.7042, 1.27 bps decreased from prior closing of 2.7169.

US equity futures pointed to a lower open this morning with treasuries remaining almost unchanged as investors awaited fresh developments from the US and China trade. The main drivers for the decline in equities this morning are widened US trade deficit and weaker ADP employment numbers. Overnight, Chinese shares continued to outperform despite of their weak GDP growth forecast. In Washington, the White House is under a barrage of inquiries from Democratic committee on a dispute over security clearances granted to Jared Kusher, the president’s son-in-law, and others. On the trade front, President Trump is pressuring US negotiators to reach a deal with China soon as he grows increasingly concerned about potential drag in stocks due to lack of an agreement. The dollar advanced for a sixth day and WTI crude slipped this morning.

MBA Mortgage Applications Index fell 2.50% after rising 5.30% in prior week. Both purchases and refinances declined 2.60% and 2.00% after rising 6.10% and 4.60% in prior, respectively. ADP Employment Change came in slightly lower than consensus of 190k at 183k. Moderation in hiring pace in February followed a massively revised prior reading of 300k from 213k in January. The US Trade Deficit widened to $59.80 billion from revised prior of $50.30 billion, marking the highest level of deficit since 2008. New York Fed President Williams will speak at the Economic Club of New York at 9:00 AM (PT), and the Fed will release the Beige Book at 11:00 AM (PT) today.

The curve has bull-steepened with UST 10-Year yield down 1.27 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  03/04 Construction Spending MoM 07:00 Dec 0.10% -0.60% 0.80% -  
                   
  03/05 Markit US Services PMI 06:45 Feb F 56.20 56.00 56.20 -  
                   
  03/05 Markit US Composite PMI 06:45 Feb F - 55.50 55.80 -  
                   
  03/05 New Home Sales 07:00 Dec 600k 621k 657k 599k  
                   
  03/05 New Home Sales MoM 07:00 Dec -8.70% 3.70% 16.90% 9.10%  
                   
  03/05 Monthly Budget Statement 11:00 Jan $10.00b - -$13.50b -  
                   
  03/06 MBA Mortgage Applications 04:00 1 Mar - -2.50% 5.30% -  
                   
  03/06 ADP Employment Change 05:15 Feb 190k 183k 213k 300k  
                   
  03/06 Trade Balance 05:30 Dec -$57.90b -$59.80b -$49.30b -$50.30b  
                   
  03/06 U.S. Federal Reserve Releases Beige Book 11:00 - - - - -  
                   
  03/07 Challenger Job Cuts YoY 04:30 Feb - - 18.70% -  
                   
  03/07 Initial Jobless Claims 05:30 2 Mar 225k - 225k -  
                   
  03/07 Continuing Claims 05:30 23 Feb 1774k - 1805k -  
                   
  03/07 Nonfarm Productivity 05:30 4Q F 1.50% - 2.30% 2.20%  
                   
  03/07 Unit Labor Costs 05:30 4Q F 1.70% - 0.90% -  
                   
  03/07 Bloomberg Consumer Comfort 06:45 3 Mar - - 61.00 -  
                   
  03/08 Change in Nonfarm Payrolls 05:30 Feb 181k - 304k -  
                   
  03/08 Unemployment Rate 05:30 Feb 3.80% - 4.00% -  
                   
  03/08 Average Hourly Earnings MoM 05:30 Feb 0.30% - 0.10% -  
                   
  03/08 Average Hourly Earnings YoY 05:30 Feb - - 3.20% -  
                   
  03/08 Labor Force Participation Rate 05:30 Feb - - 63.20% -  
                   
  03/08 Wholesale Inventories MoM 07:00 Jan F - - - -  
                   
  03/08 Wholesale Trade Sales MoM 07:00 Jan - - - -  
                   
 
 
 
 
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