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Market Commentary


 
Today's Coupons
 
  10-Year Notes   102-01 (-03.5)  
 
  FN 3.5% Coupon   101-12.5 (-04.5)  
 
  Support   3.237%  
 
  Resistance   2.342%  
 
 
 
 
Thursday, March 28, 2019
 
 
Treasury Yields Climb as Trade Talks Resume
 
 
Market opened today’s session with treasuries inching lower across all maturities. 10-Year treasury yield is at 2.3840, 1.75 bps increased from prior closing of 2.3665.

Treasuries and German bunds stabilized after treasuries reaching the lowest level in 15 months. US stock futures also remained steady this morning. British pound fell after the UK Parliament failed to reach a majority on all eight motions that they voted on last night which ranged from no deal to canceling Brexit altogether. Prime Minister May offered to step down if her Conservative members of Parliament will back her Brexit deal but it seemed to have failed as well. On the trade front, the US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are in Beijing seeking to reach an end to the trade war although the chance of a breakthrough this time is seemingly low. Elsewhere, WTI crude slid below $59 a barrel this morning.

GDP in the fourth quarter last year came in short of expectation of 2.30% at 2.20%, declined from prior of 2.60%. Personal Consumption also slightly fell to 2.50% from 2.80% prior vs. 2.60% consensus. Initial Jobless Claims printed 211k vs. 216k revised prior and 220k consensus, and Continuing Claims came in at 1756k vs. 1743k revised prior and 1778k consensus. Bloomberg Consumer Comfort fell to 60.00 from 61.50 prior. Lastly, Pending Home Sales in February declined 1.00% from an increase of 4.30% in January vs. consensus of a 0.50% decline. The US Treasury is scheduled to auction off $50 billion of 4-week bills and $35 billion of 8-week bills at 8:30 AM (PT), and $32 billion of 7-Year notes at 10:00 AM (PT). With global investors shifting their focus to debt in fear of recession, many will parse the tone of speeches from the Fed officials today seeking hints as to what the Fed plans to do next. Atlanta Fed President Bostic will discuss workforce development, income mobility and income inequality at 8:30 AM (PT), New York Fed President Williams will take part in a moderated discussion in Puerto Rico at 10:15 AM (PT), and finally, St. Louis Fed President Bullard will discuss his outlook for the US economy and monetary policy at University of Wisconsin-Madison at 2:20 PM (PT) today.

The curve has bear-flattened with UST 10-Year yield up 1.75 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% 2.20% 2.60% -  
                   
  03/28 Personal Consumption 05:30 4Q T 2.60% 2.50% 2.80% -  
                   
  03/28 GDP Price Index 05:30 4Q T 1.80% 1.70% 1.80% -  
                   
  03/28 Core PCE QoQ 05:30 4Q T 1.70% 1.80% 1.70% -  
                   
  03/28 Initial Jobless Claims 05:30 23 Mar 220k 211k 221k 216k  
                   
  03/28 Continuing Claims 05:30 16 Mar 1778k 1756k 1750k 1743k  
                   
  03/28 Bloomberg Consumer Comfort 06:45 24 Mar - 60.00 61.50 -  
                   
  03/28 Pending Home Sales MoM 07:00 Feb -0.50% -1.00% 4.60% 4.30%  
                   
  03/28 Pending Home Sales NSA YoY 07:00 Feb -3.00% -5.00% -3.20% -3.30%  
                   
  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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