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Market Commentary


 
Today's Coupons
 
  10-Year Notes   100-08 (-01)  
 
  FN 3.5% Coupon   100-20.5 (+0.5)  
 
  Support   3.237%  
 
  Resistance   2.342%  
 
 
 
 
Wednesday, April 17, 2019
 
 
Treasury Yields Edge Higher on Positive China Outlook
 
 
Market opened today’s session with treasuries slightly lower across all maturities, but most overnight losses have been erased since. The 10-Year treasury yield is currently at 2.589 after closing at 2.591 prior.

Treasuries weakened overnight while U.S. stock futures gained after data showed optimism for China’s economic outlook. Market sentiment bolstered as China’s economic growth, industrial production, and retail sales all beat expectations. Amid its reported 6.40% first quarter GDP growth, the country’s leaders are now considering more stimulus measures to support the growth momentum. In the U.S., the trade balance narrowed further in February after tightening much more than expected in January. Economists expected the trade balance to widen to $53.40 billion, but the gap narrowed to $49.40 billion from $51.10 billion prior. From a bilateral standpoint, the trade deficit has sharply narrowed with both China and the European Union to start 2019. In the latest batch of corporate earnings, Morgan Stanley and PepsiCo Inc. both posted solid results, while Netflix Inc. and IBM Corp. both came in weaker than expected.

MBA Mortgage Applications for the week ended April 12 fell 3.50% following a 5.60% decline the week prior. Purchase applications were up 0.90% after reporting a 0.50% increase the week prior, while refinancing activities dropped 8.20% after falling 11.40% the week prior. Wholesale Inventories rose 0.20% in February following an unrevised 1.20% increase in January. Consensus called for a 0.30% increase month-over-month, so the data came in slightly weaker than expected. Wholesale Trade Sales came in line with expectations which rose 0.30% in February following an unrevised 0.50% increase prior. Philadelphia Fed President Harker and St. Louis Fed President Bullard will speak later this morning on the economic outlook. Then at 11:00 AM (PT), the latest version of the Fed’s Beige Book will be released.

The curve has bull-steepened with the UST 10-Year yield down 0.2 bp from prior closing
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  04/15 Empire Manufacturing 05:30 Apr 8.00 10.10 3.70 -  
                   
  04/16 Industrial Production MoM 06:15 Mar 0.20% -0.10% 0.10% 0.10%  
                   
  04/16 Capacity Utilization 06:15 Mar 79.20% 78.80% 78.20% 79.00%  
                   
  04/16 NAHB Housing Market Index 07:00 Apr 63.00 63.00 62.00 -  
                   
  04/17 MBA Mortgage Applications 04:00 12 Apr - -3.50% -5.60% -  
                   
  04/17 Trade Balance 05:30 Feb -$53.40b -$49.40b -$51.10b -  
                   
  04/17 Wholesale Inventories MoM 07:00 Feb 0.30% 0.20% 1.20% -  
                   
  04/17 Wholesale Trade Sales MoM 07:00 Feb 0.30% 0.30% 0.50% -  
                   
  04/17 U.S. Federal Reserve Releases Beige Book 11:00 - - - - -  
                   
  04/18 Retail Sales Advance MoM 05:30 Mar 1.00% - -0.20% -  
                   
  04/18 Initial Jobless Claims 05:30 13 Apr 205k - 196k -  
                   
  04/18 Continuing Claims 05:30 6 Apr 1722k - 1713k -  
                   
  04/18 Philadelphia Fed Business Outlook 05:30 Apr 11.00 - 13.70 -  
                   
  04/18 Bloomberg Consumer Comfort 06:45 14 Apr - - 59.80 -  
                   
  04/18 Markit US Manufacturing PMI 06:45 Apr P 52.80 - 52.40 -  
                   
  04/18 Markit US Services PMI 06:45 Apr P 55.00 - 55.30 -  
                   
  04/18 Markit US Composite PMI 06:45 Apr P - - 54.60 -  
                   
  04/18 Leading Index 07:00 Mar 0.40% - 0.20% -  
                   
  04/18 Business Inventories 07:00 Feb 0.30% - 0.80% -  
                   
  04/19 Housing Starts 05:30 Mar 1230k - 1162k -  
                   
  04/19 Housing Starts MoM 05:30 Mar 5.90% - -8.70% -  
                   
  04/19 Building Permits 05:30 Mar 1300k - 1296k 1291k  
                   
  04/19 Building Permits MoM 05:30 Mar 0.70% - -1.60% -2.00%  
                   
 
 
 
 
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