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Market Commentary


 
Today's Coupons
 
  10-Year Notes   102-16 (+10.5)  
 
  FN 3.5% Coupon   102-01.5 (+04)  
 
  Support   3.237%  
 
  Resistance   2.062%  
 
 
 
 
Thursday, June 06, 2019
 
 
Treasury Yields Lower Further on Rate Outlook
 
 
Market opened today’s session with treasuries rallying across all maturities. 10-Year Treasury yield is at 2.0984, 3.64 bps decreased from prior closing of 2.1348.

The prospect of looser monetary policy from the Fed continued to dominate investor sentiment this morning. US equity index futures pointed to a higher open and Treasuries extended gain as well. However, investor sentiment still remains fragile as optimism over a potential rate cut is offset by ongoing trade disputes. President Trump said “not nearly enough” progress was made at the first discussion with Mexico over tariffs but the talks are set to continue today. He also told reporters that tariffs on China could go up by another $300 billion if necessary without giving details on what goods could be targeted. The People’s Bank of China injected 500 billion yuan into their financial system to ease liquidity concerns after the government’s first seizure of a bank in more than two decades last month drove up funding costs. Elsewhere, WTI crude extended losses from prior session, trading below $52 a barrel this morning.

The US Trade Deficit narrowed in April to $50.8 billion from a revised $51.9 billion in March. Initial Jobless Claims continued to show stability by printing an unchanged reading from a revised prior of 218k. Continuing Claims edged higher to 1682k from an upwardly revised prior of 1662k. The consensus called for 215k and 1660k for both claims, respectively. Lastly, Bloomberg Consumer Comfort came in higher than prior reading of 60.80 at 61.70. Later today, the US Treasury is scheduled to auction off $40 billion of 4-week bills and $35 billion of 8-week bills at 8:30 AM (PT).

The curve has bull-flattened with UST 10-Year yield down 3.64 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 - 1.50% -3.30% -  
                   
  06/05 ADP Employment Change 05:15 May 185k 27k 275k 271k  
                   
  06/05 Markit US Services PMI 06:45 May F 50.90 50.90 50.90 -  
                   
  06/05 Markit US Composite PMI 06:45 May F - 50.90 50.90 -  
                   
  06/05

U.S. Federal Reserve Releases Beige

Book

11:00 May - - - -  
                   
  06/06 Challenger Job Cuts YoY 04:30 May - 85.90% 10.90% -  
                   
  06/06 Nonfarm Productivity 05:30 1Q F 3.50% 3.40% 3.60% -  
                   
  06/06 Unit Labor Costs 05:30 1Q F -0.90% -1.60% -0.90% -  
                   
  06/06 Initial Jobless Claims 05:30 1 Jun 215k 218k 215k 218k  
                   
  06/06 Continuing Claims 05:30 25 May 1660k 1682k 1657k 1662k  
                   
  06/06 Bloomberg Consumer Comfort 06:45 2 Jun - 61.7 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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