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Market Commentary


 
Today's Coupons
 
  10-Year Notes   102-04 (-18)  
 
  FN 3.5% Coupon   102-0.5 (-06)  
 
  Support   3.237%  
 
  Resistance   2.062%  
 
 
 
 
Tuesday, June 04, 2019
 
 
Treasury Yields Rebound as Trade Concerns Ease
 
 
Market opened today’s session with treasuries selling-off across all maturities. 10-Year Treasury yield is at 2.1020, 3.10 bps increased from prior closing of 2.0710.

A week-long rally in Treasuries finally came to an end this morning as investor sentiment was lifted over trade hopes. The Chinese Commerce Ministry said that the trade dispute with the US should be dealt with talks and market perceived it as a sign of the country easing up on its tough rhetoric. Also, Mexico’s president said talks with the US over immigration and trade were going well and that he expected to find common ground with the US before June 10th when 5.00% tariffs are set to become effective. The news certainly brightened up the trade outlook and US stock futures climbed this morning. Meanwhile, comments from the Fed officials yesterday indicated that they were moving closer to a rate cut. St. Louis Fed President Bullard said a rate cut might be needed soon to offset trade risks, and Vice Chairman Clarida said that they are prepared to loosen the monetary policy if needed. Investors are now positioned for at least two rate cuts by the end of the year. Elsewhere, WTI crude edged lower, trading slightly above $53 a barrel this morning.

Factory Orders in April slid to -0.80% from a downwardly revised prior of 1.30% while the consensus called for a 1.00% decline. The headline Durable Goods Orders in April remained unchanged from prior reading of -2.10% and the core also printed the same reading of 0.00% from prior. Fed Chair Powell will be discussing monetary policy strategy at the Fed’s framework review conference in Chicago, and Fed Governor Brainard will also moderate a panel at the same conference today.

The curve has bear-flattened with UST 10-Year yield up 3.10 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% -0.80% 1.90% 1.30%  
                   
  06/04 Durable Goods Orders 07:00 Apr F - -2.10% -2.10% -  
                   
  06/04 Durables Ex Transportation 07:00 Apr F - 0.00% 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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