Treasuries are slightly lower across the curve this morning from yesterday’s close. The UST10-Year yield is currently at 2.857% after closing at 2.851% prior.
Trade war jitters resurfaced late Tuesday after the Trump Administration announced to impose another 10 percent tariffs on $200 Billion more of Chinese made-products in addition to the initial $50 Billion already initiated. Chinese President Xi Jinping has already vowed to retaliate against every trade action from President Trump, and the tone in his response yesterday remained unchanged as he promised “firm and forceful measures” against the U.S. This morning we received the June PPI Final Demand which rose 0.30% MoM following a 0.50% gain prior, bringing its YoY up to 3.40% from 3.10% prior. PPI excluding Food and Energy MoM increased higher than expected at 0.30% versus 0.20% per consensus, bringing its YoY up to 2.80% from 2.40% prior.
MBA Mortgage Applications for the week ended July 6 rose 2.50% following a 0.50% drop in activities the week prior. Purchase applications were up 6.50% for the week after rising 0.50% the week prior, while refinancing activities fell 3.80% after dropping 2.00% the week prior. We also received the Wholesale Inventories for May which rose 0.60% MoM versus a 0.50% increase prior. Later today at 10:00 AM (PT), U.S. will sell $22 Billion of 10-Year Notes Reopening. Then at 1:30 PM (PT), New York Fed President Williams will speak to business and community leaders in Brooklyn.
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Trade war jitters resurfaced late Tuesday after the Trump Administration announced to impose another 10 percent tariffs on $200 Billion more of Chinese made-products in addition to the initial $50 Billion already initiated. Chinese President Xi Jinping has already vowed to retaliate against every trade action from President Trump, and the tone in his response yesterday remained unchanged as he promised “firm and forceful measures” against the U.S. This morning we received the June PPI Final Demand which rose 0.30% MoM following a 0.50% gain prior, bringing its YoY up to 3.40% from 3.10% prior. PPI excluding Food and Energy MoM increased higher than expected at 0.30% versus 0.20% per consensus, bringing its YoY up to 2.80% from 2.40% prior.
MBA Mortgage Applications for the week ended July 6 rose 2.50% following a 0.50% drop in activities the week prior. Purchase applications were up 6.50% for the week after rising 0.50% the week prior, while refinancing activities fell 3.80% after dropping 2.00% the week prior. We also received the Wholesale Inventories for May which rose 0.60% MoM versus a 0.50% increase prior. Later today at 10:00 AM (PT), U.S. will sell $22 Billion of 10-Year Notes Reopening. Then at 1:30 PM (PT), New York Fed President Williams will speak to business and community leaders in Brooklyn.
The curve has bear-flattened with the UST 10-Year yield up 0.6 bp from prior closing.