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Market Commentary


 
Today's Coupons
 
  10-Year Notes   102-11 (+06)  
 
  FN 3.5% Coupon   102-02 (+02.5)  
 
  Support   3.237%  
 
  Resistance   2.080%  
 
 
 
 
Monday, June 03, 2019
 
 
Treasury Yields Lower Further as Trade Spat Continues
 
 
Market opened today’s session with treasuries advancing across all maturities. 10-Year Treasury yield is at 2.1055, 1.91 bps decreased from prior closing of 2.1246.

With safe haven displaying dominance, Treasuries advanced this morning as stocks pointed to a lower open after China extended retaliatory tariffs on imports from the US. The Dow started this week with six straight weeks of losses, marking its longest weekly slide since 2011. On the other hand, the 2-Year Treasury yield headed for the biggest two-day decline since January 2008 as the spat between the US and China intensified over the weekend. China is also now targeting FedEx in a probe after the company failed to deliver items to the correct addresses. Two packages containing documents being shipped to Huawei in China were diverted to the US without authorization and FedEx has apologized for the delivery errors. As President Trump slapped 5.00% tariffs on all imports from Mexico over illegal immigration last week, many analysts revised their economic forecasts to higher probability of a recession later this year. Elsewhere, WTI crude traded over $54 a barrel this morning.

Markit US Manufacturing PMI in May remained almost unchanged at 50.50 following 50.60 in prior month. ISM Manufacturing in May also edged lower to 52.10 from 52.80 prior vs. 53.00 consensus. ISM Prices Paid in May, however, climbed to 53.20 from 50.00 prior vs. 51.00 consensus. Lastly, Construction Spending in April remained flat from an upwardly revised prior of 0.10% vs. 0.40% consensus. Later today, the US Treasury is scheduled to auction off $36 billion of 3-month bills and $36 billion of 6-month bills at 8:30 AM (PT).

The curve has bull-steepened with UST 10-Year yield down 1.91 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  06/03 Markit US Manufacturing PMI 06:45 May F 50.60 50.50 50.60 -  
                   
  06/03 ISM Manufacturing 07:00 May 53.00 52.10 52.80 -  
                   
  06/03 ISM Prices Paid 07:00 May 51.00 53.20 50.00 -  
                   
  06/03 Construction Spending MoM 07:00 Apr 0.40% 0.00% -0.90% 0.10%  
                   
  06/04 Factory Orders 07:00 Apr -1.00% - 1.90% -  
                   
  06/04 Durable Goods Orders 07:00 Apr F - - -2.10% -  
                   
  06/04 Durables Ex Transportation 07:00 Apr F - - 0.00% -  
                   
  06/05 MBA Mortgage Applications 04:00 31 May - - -3.30% -  
                   
  06/05 ADP Employment Change 05:15 May 185k - 275k -  
                   
  06/05 Markit US Services PMI 06:45 May F 50.90 - 50.90 -  
                   
  06/05 Markit US Composite PMI 06:45 May F - - 50.90 -  
                   
  06/05

U.S. Federal Reserve Releases Beige

Book

11:00 May - - - -  
                   
  06/06 Challenger Job Cuts YoY 04:30 May - - 10.90% -  
                   
  06/06 Nonfarm Productivity 05:30 1Q F 3.50% - 3.60% -  
                   
  06/06 Unit Labor Costs 05:30 1Q F -0.90% - -0.90% -  
                   
  06/06 Initial Jobless Claims 05:30 1 Jun 215k - 215k -  
                   
  06/06 Continuing Claims 05:30 25 May 1660k - 1657k -  
                   
  06/06 Bloomberg Consumer Comfort 06:45 2 Jun - - 60.80 -  
                   
  06/07 Unemployment Rate 05:30 May 3.60% - 3.60% -  
                   
  06/07 Average Hourly Earnings MoM 05:30 May 0.30% - 0.20% -  
                   
  06/07 Average Hourly Earnings YoY 05:30 May 3.20% - 3.20% -  
                   
  06/07 Labor Force Participation Rate 05:30 May - - 62.80% -  
                   
  06/07 Wholesale Inventories MoM 07:00 Apr F 0.70% - 0.70% -
                   
 
 
 
 
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