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Market Commentary


 
Today's Coupons
 
  10-Year Notes   101-09 (+07.5)  
 
  FN 3.5% Coupon   101-01 (+03.5)  
 
  Support   3.237%  
 
  Resistance   2.463%  
 
 
 
 
Wednesday, May 01, 2019
 
 
Treasury Yields Lower ahead of FOMC Rate Decision
 
 
Market opened today’s session with treasuries advancing across all maturities. 10-Year treasury yield is at 2.4748, 2.70 bps decreased from prior closing of 2.5018.

Stocks rose to a new record after Apple’s quarterly results topped analyst estimates and Advanced Micro Devices reported guidance indicating momentum, which buoyed investor sentiment. CVS Health also surged on better-than-expected results. Overall, this corporate earnings season turned out to be better than expected as about 75.00% of the companies that have reported results have beaten estimates so far. HSBC, Macquarie, and Royal Dutch Shell are among the companies that are set to post their quarterly earnings this week. Today, all eyes will turn to the Fed’s rate decision at 11:00 AM (PT) and the Fed Chair Powell’s press conference right after. It is widely expected that the rate will remain unchanged but the statement and the press conference will be closely parsed, especially usage of the phrase “being patient”, for better indication on the outlook of the rest of 2019. Elsewhere, WTI crude slightly edged below $64 a barrel this morning.

MBA Mortgage Applications Index fell 4.30% after falling 7.30% in prior week. Both purchases and refinances declined 3.70% and 5.00% after falling 4.10% and 11.00% in prior week, respectively. ADP Employment Change in April printed a strong reading of 275k vs. revised prior of 151k and 180k consensus which bolstered the bullish sentiment early in the morning. Markit US Manufacturing PMI slightly edged higher to 52.60 from both 52.40 prior and consensus. However, ISM Manufacturing fell to 52.80 in April from 55.30 prior vs. 55.00 consensus, and Construction Spending also fell to -0.90% from a downwardly revised prior of 0.70% in March.

The curve has bull-flattened with UST 10-Year yield down 2.70 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  04/29 Personal Income 05:30 Mar 0.40% 0.10% 0.20% -  
                   
  04/29 Personal Spending 05:30 Mar 0.70% 0.90% - 0.10%  
                   
  04/29 PCE Deflator MoM 05:30 Mar 0.30% 0.20% - 0.10%  
                   
  04/29 PCE Deflator YoY 05:30 Mar 1.60% 1.50% - 1.30%  
                   
  04/29 Dallas Fed Manf. Activity 07:30 Apr 10.00 2.00 8.30 6.90  
                   
  04/30 Employment Cost index  05:30 1Q 0.70% 0.70% 0.70% -  
                   
  04/30 S&P CoreLogic CS 20-City MoM SA 06:00 Feb 0.20% 0.20% 0.11% 0.09%  
                   
  04/30 S&P CoreLogic CS 20-City YoY NSA 06:00 Feb 2.95% 3.00% 3.58% 3.51%  
                   
  04/30 Pending Home Sales MoM 07:00 Mar 1.50% 3.80% -1.00% -  
                   
  04/30 Pending Home Sales NSA YoY 07:00 Mar -4.00% -3.20% -5.00% -  
                   
  05/01 MBA Mortgage Applications 04:00 26 Apr - -4.30% -7.30% -  
                   
  05/01 ADP Employment Change 05:15 Apr 180k 275k 129k 151k  
                   
  05/01 Markit US Manufacturing PMI 06:45 Apr F 52.40 52.60 52.40 -  
                   
  05/01 ISM Manufacturing 07:00 Apr 55.00 52.80 55.30 -  
                   
  05/01 ISM Prices Paid 07:00 Apr 55.00 50.00 54.30 -  
                   
  05/01 Construction Spending MoM 07:00 Mar 0.00% -0.90% 1.00% 0.70%  
                   
  05/01 FOMC Rate Decision (Upper Bound) 11:00 1 May 2.50% - 2.50% -  
                   
  05/01 FOMC Rate Decision (Lower Bound) 11:00 1 May 2.25% - 2.25% -  
                   
  05/02 Challenger Job Cuts YoY 04:30 Apr - - 0.40% -  
                   
  05/02 Nonfarm Productivity 05:30 1Q P 2.20% - 1.90% -  
                   
  05/02 Unit Labor Costs 05:30 1Q P 1.50% - 2.00% -  
                   
  05/02 Initial Jobless Claims 05:30 27 Apr 215k - 230k -  
                   
  05/02 Continuing Claims 05:30 20 Apr 1660k - 1655k -  
                   
  05/02 Bloomberg Consumer Comfort 06:45 28 Apr - - 60.80 -  
                   
  05/02 Factory Orders 07:00 Mar 1.50% - -0.50% -  
                   
  05/02 Durable Goods Orders 07:00 Mar F - - 2.70% -  
                   
  05/02 Durables Ex Transportation 07:00 Mar F - - 0.40% -  
                   
  05/03 Wholesale Inventories MoM 05:30 Mar P 0.20% - 0.20% -  
                   
  05/03 Change in Nonfarm Payrolls 05:30 Apr 185k - 196k -  
                   
  05/03 Unemployment Rate 05:30 Apr 3.80% - 3.80% -  
                   
  05/03 Average Hourly Earnings MoM 05:30 Apr 0.30% - 0.10% -  
                   
  05/03 Average Hourly Earnings YoY 05:30 Apr 3.30% - 3.20% -  
                   
  05/03 Labor Force Participation Rate 05:30 Apr 63.00% - 63.00% -  
                   
  05/03 Markit US Services PMI 06:45 Apr F 52.90 - 52.90 -  
                   
  05/03 Markit US Composite PMI 06:45 Apr F - - 52.80 -
                   
 
 
 
 
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