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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   98-00.5 (-12) 2.351%  
  FN 3.5% Coupon   103-02 (-02.5)  
  Support   2.510%  
  Resistance   2.260%  
Today's Blurb Thursday, June 18, 2015
        The Current Account Deficit for the first quarter of 2015 increased to $113.3 Billion from $103.1 Billion (revised) in the fourth quarter of 2014. The deficit increased to 2.6% of GDP from 2.3% in the fourth quarter of last year. The Goods Deficit increased to $189 Billion in the first quarter from $186 Billion prior, and the Services Surplus increased to $58.7 Billion from $57.6 Billion prior. The Consumer Price Index (MoM) came in soft at +0.4% (consensus +0.5%) vs. +0.1% prior, and within the Core edged up +0.1% (consensus +0.2%) vs. +0.3% prior. The +0.4% CPI headline gain largely reflects an upswing in energy costs, specifically gasoline which surged +10.4%. Year-over-year the Consumer Price Index is showing no gains (consensus +0.1%) after April’s negative -0.2% reading. Initial Jobless Claims for the week ended June 13th fell by -12K to 267K vs. 279K prior for a 15th straight week of Claims below 300K. The 4-week moving average for Initial Claims fell to 276,750 from 278,750 prior. Continuing Claims declined by -50K to 2.222 Million with the 4-week average up by +2K at 2.231 Million.
             Yesterday the FOMC released their statement and left the Fed Funds rate range unchanged. The Fed admitted to stronger U.S. growth, however they were hesitant to make a more robust statement and left the language largely unchanged from the prior release. The Fed updated their economic projections to show a slower growth trajectory in 2015 and 2016. The Fed downgraded 2015 GDP growth to 1.8-2.0% from the previous forecast of 2.3-2.7%. The Dovish FOMC projections led to a rally in Treasuries yesterday afternoon and this morning, following the data release, we are hovering near yesterday’s 2:00 PM (PT) close. The curve has continued to bull steepened with 2s10s up +4.3 bps and 2s5s up +2.2 bps.
This Week's Events
  06/15 Empire Manufacturing 05:30 June 6.00 -1.98 3.09 -  
  06/15 Industrial Production MoM 06:15 May 0.20% -0.20% -0.30% -0.50%  
  06/16 Housing Starts 05:30 May 1090K 1036K 1135K 1165K  
  06/16 Housing Starts MoM 05:30 May -4.00% -11.10% 20.20% 22.10%  
  06/16 Building Permits 05:30 May 1100K 1275K 1143K 1140K  
  06/16 Building Permits MoM 05:30 May -3.50% 11.80% 10.10% 9.80%  
  06/17 MBA Mortgage Applications 04:00 Jun 12 - -5.50% 8.40% -  
  06/17 FOMC Rate Decision 11:00 June 17 0.25% 0.25% 0.25% -  
  06/18 CPI MoM 05:30 May 0.50% 0.40% 0.10% -  
  06/18 CPI YoY 05:30 May 0.10% 0.00% -0.20% -  
  06/18 Initial Jobless Claims 05:30 Jun 13 277K 267K 279K -  
  06/18 Continuing Claims 05:30 June 6 2210K 2222K 2265K 2272K  
  06/18 Leading Index 07:00 May 0.40% 0.70% 0.70% -  
  06/19 No Data - - - - - -  
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