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Market Commentary


 
Today's Coupons
 
  10-Year Notes   101-08 (+09.5)  
 
  FN 3.5% Coupon   101-19.5 (+03.5)  
 
  Support   3.237%  
 
  Resistance   2.220%  
 
 
 
 
Wednesday, May 29, 2019
 
 
Treasury Yields Lower Further on Recession Warning
 
 
Market opened today’s session with treasuries rallying across all maturities. 10-Year Treasury yield is at 2.2220, 4.38 bps decreased from prior closing of 2.2658.

Stocks tumbled again this morning as investors sought safe haven in a wave of risk aversion, driving the Treasury yields to multi-year lows. The spread between the 3-month and 10-year Treasury yields fell as low as -12 bps, marking the widest negative gap since 2007. Along with Treasuries, the dollar extended gain for a third day against its major counterparts. With renewed concerns over the health of the economy due to the further inverted yield curve which is often viewed as a preceding sign of pending recession, WTI crude fell more than 2.00% below $58 a barrel this morning. The trade tensions between the US and China continued to affect the markets also as Beijing is reportedly gearing up to use its dominance in the global supply of rare-earth elements as a counter to US trade measures.

MBA Mortgage Applications Index fell 3.30% after rising 2.40% in prior week. Both purchases and refinances declined 1.40% and 6.00% after falling 2.00% and rising 8.30% in prior week, respectively. Richmond Fed Manufacturing Index in May fell to 5.00 below consensus of 7.00, following 3.00 in April. Later today, the US Treasury is scheduled to auction off $18 billion of 2-year FRN at 8:30 AM (PT), and $32 billion of 7-year notes at 10:00 AM (PT).

The curve has bull-steepened with UST 10-Year yield down 4.38 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  05/27 No Data - - - - - -  
                   
  05/28 FHFA House Price Index MoM 06:00 Mar 0.20% 0.10% 0.30% 0.40%  
                   
  05/28 S&P CoreLogic CS 20-City MoM SA 06:00 Mar 0.46% 0.09% 0.20% 0.26%  
                   
  05/28 S&P CoreLogic CS 20-City YoY NSA 06:00 Mar 2.50% 2.68% 3.00% 2.95%  
                   
  05/28 Dallas Fed ManfActivity 07:30 May 6.20 -5.30 2.00 -  
                   
  05/29 MBA Mortgage Applications 04:00 24 May - -3.30% 2.40% -  
                   
  05/29 Richmond Fed ManufactIndex 07:00 May 7.00 5.00 3.00 -  
                   
  05/30 GDP Annualized QoQ 05:30 1Q S 3.00% - 3.20% -  
                   
  05/30 Wholesale Inventories MoM 05:30 Apr P 0.10% - -0.10% -  
                   
  05/30 Personal Consumption 05:30 1Q S 1.20% - 1.20% -  
                   
  05/30 GDP Price Index 05:30 1Q S 0.90% - 0.90% -  
                   
  05/30 Core PCE QoQ 05:30 1Q S 1.30% - 1.30% -  
                   
  05/30 Initial Jobless Claims 05:30 25 May 215k - 211k -  
                   
  05/30 Continuing Claims 05:30 18 May 1667k - 1676k -  
                   
  05/30 Bloomberg Consumer Comfort 06:45 26 May - - 60.30 -  
                   
  05/30 Pending Home Sales MoM 07:00 Apr 0.50% - 3.80% -  
                   
  05/30 Pending Home Sales NSA YoY 07:00 Apr 0.10% - -3.20% -  
                   
  05/31 Personal Income 05:30 Apr 0.30% - 0.10% -  
                   
  05/31 Personal Spending 05:30 Apr 0.20% - 0.90% -  
                   
  05/31 PCE Deflator MoM 06:45 12 May 0.30% - 0.20% -  
                   
  05/31 PCE Deflator YoY 07:00 Apr 1.60% - 1.50% -  
                   
  05/31 U. of MichSentiment 07:00 May F 101.00 - 102.40 -
                   
 
 
 
 
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