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Market Commentary


 
Today's Coupons
 
  10-Year Notes   102-03.5 (+11.5)  
 
  FN 3.5% Coupon   101-19 (+05)  
 
  Support   3.237%  
 
  Resistance   2.365%  
 
 
 
 
Wednesday, March 27, 2019
 
 
Treasury Yields Lower as Recession Fears Linger
 
 
Market opened today’s session with treasuries edging higher across all maturities. 10-Year treasury yield is at 2.3753, 4.77 bps decreased from prior closing of 2.4230.

The yield curve has inverted prior to each recession in the past 50 years and showed only one false indication. As the curve remained inverted and worries over the economy lingered, US equity futures remained nearly unchanged this morning. Treasuries inched higher with German 10-Year bunds selling at a below-zero yield for the first time since 2016. European Central Bank President Draghi reiterated their accommodative policy stance in a speech as well. With numerous signs of slowdown in the global economy, central banks are stepping away from monetary tightening and global investors are favoring debts. On the trade front, the US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will resume trade talks in Beijing tomorrow with China’s Vice Premier Liu He expected in Washington the following week. Elsewhere, WTI crude hovered around $60 a barrel this morning.

MBA Mortgage Applications index rose 8.90% after rising 1.60% in prior week. Both purchases and refinances increased 6.40% and 12.40% after rising 0.30% and 3.50% prior, respectively. The trade deficit in January narrowed to $51.10 billion from an upwardly revised deficit of $59.90 billion in prior month vs. $57.00 billion of deficit consensus. However, Current Account Balance in 4th quarter fell to -$134.40 billion from revised prior of -$126.60 billion vs. -$130.00 billion consensus. The US Treasury is scheduled to auction off $18 billion of 2-Year FRN at 8:30 AM (PT) and $41 billion of 5-Year notes at 10:00 AM (PT).

The curve has bull-steepened with UST 10-Year yield down 4.77 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  03/25 Chicago Fed Nat Activity Index 05:30 Feb -0.38 -0.29 -0.43 -0.25  
                   
  03/25 Dallas Fed Manf. Activity 07:30 Mar 8.90 8.30 13.10 -  
                   
  03/26 Housing Starts 05:30 Feb 1210k 1162k 1230k 1273k  
                   
  03/26 Housing Starts MoM 05:30 Feb -1.60% -8.70% 18.60% 11.70%  
                   
  03/26 Building Permits 05:30 Feb 1305k 1296k 1345k 1317k  
                   
  03/26 Building Permits MoM 05:30 Feb -0.90% -1.60% 1.40% -0.70%  
                   
  03/26 FHFA House Price Index MoM 06:00 Jan 0.40% 0.60% 0.30% -  
                   
  03/26 S&P CoreLogic CS 20-City MoM SA 06:00 Jan 0.30% 0.11% 0.19% 0.17%  
                   
  03/26 S&P CoreLogic CS 20-City YoY NSA 06:00 Jan 3.80% 3.58% 4.18% 4.14%  
                   
  03/26 Richmond Fed Manufact. Index 07:00 Mar 10.00 10.00 16.00 -  
                   
  03/27 MBA Mortgage Applications 04:00 22 Mar - 8.90% 1.60% -  
                   
  03/28 GDP Annualized QoQ 05:30 4Q T 2.30% - 2.60% -  
                   
  03/28 Personal Consumption 05:30 4Q T 2.60% - 2.80% -  
                   
  03/28 GDP Price Index 05:30 4Q T 1.80% - 1.80% -  
                   
  03/28 Core PCE QoQ 05:30 4Q T 1.70% - 1.70% -  
                   
  03/28 Initial Jobless Claims 05:30 23 Mar 220k - 221k -  
                   
  03/28 Continuing Claims 05:30 16 Mar 1778k - 1750k -  
                   
  03/28 Bloomberg Consumer Comfort 06:45 24 Mar - - 61.50 -  
                   
  03/28 Pending Home Sales MoM 07:00 Feb -0.50% - 4.60% -  
                   
  03/28 Pending Home Sales NSA YoY 07:00 Feb -3.00% - -3.20% -  
                   
  03/28 Kansas City Fed Manf. Activity 08:00 Mar 0.00 - 1.00 -  
                   
  03/29 Personal Income 05:30 Feb 0.30% - -0.10% -  
                   
  03/29 Personal Spending 05:30 Jan 0.30% - -0.50% -  
                   
  03/29 PCE Deflator MoM 05:30 Jan 0.00% - 0.10% -  
                   
  03/29 PCE Deflator YoY 05:30 Jan 1.40% - 1.70% -  
                   
  03/29 PCE Core MoM 05:30 Jan 0.20% - 0.20% -  
                   
  03/29 PCE Core YoY 05:30 Jan 1.90% - 1.90% -  
                   
  03/29 U. of Mich. Sentiment 07:00 Mar F 97.80 - 97.80 -  
                   
 
 
 
 
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