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Market Commentary


 
Today's Coupons
 
  10-Year Notes   102-28 (+08)  
 
  FN 3.5% Coupon   102-13 (+02.5)  
 
  Support   3.237%  
 
  Resistance   1.939%  
 
 
 
 
Wednesday, July 24, 2019
 
 
Treasury Yields Lower after Disappointing Corporate Earnings
 
 
Market opened today’s session with treasuries advancing across all maturities. 10-Year Treasury yield is at 2.0393, 4.19 bps decreased from prior closing of 2.0812.

US stock index futures pointed to a lower open this morning after disappointing corporate results. Treasuries advanced and the dollar declined for the first time in four days. Boeing dropped after posting a massive loss and Caterpillar also slid after reporting weaker-than-expected earnings. On the positive side, UPS exceeded its profit guidance. About 25% of S&P 500 companies have reported their second quarter results so far and about 78% of those companies came in above analysts’ expectations. Investors also kept a close eye on tech sector after the US opened antitrust probe into big technology companies following mounting criticism across Washington that the companies have become too big and powerful. In Europe, the continuing decline in German manufacturing data added to concerns about the region’s growth as Purchasing Managers Index reached lowest level in seven years. On the trade front, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will lead a small team to China next week for the first high-level, face-to-face meeting since talks broke down in May. Elsewhere, WTI crude rallied for a fourth session, trading slightly below $57 a barrel this morning.

MBA Mortgage Applications index fell 1.90% after falling 1.10% in prior week. Both purchases and refinances dropped 1.60% and 2.10% after falling 3.80% and rising 1.55 in prior week, respectively. Markit US Manufacturing PMI slipped to 50.00 vs. 51.00 consensus following 50.60 in prior. On the contrary, Services PMI edged higher to 52.20 from 51.50 prior vs. 51.80 consensus. Lastly, New Home Sales in June climbed to 646k from a downwardly revised prior of 604k below consensus of 658k. Later today, the US Treasury is scheduled to auction off $20 billion of 2-year FRN at 8:30 AM (PT), and $41 billion of 5-year notes at 10:00 AM (PT).

The curve has bull-flattened with UST 10-Year yield down 4.19 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  07/22 Chicago Fed Nat Activity Index 05:30 Jun 0.08 -0.02 -0.05 -0.03  
                   
  07/23 FHFA House Price Index MoM 06:00 May 0.40% 0.10% 0.40% -  
                   
  07/23 Richmond Fed Manufact. Index 07:00 Jul 5.00 -12.00 3.00 2.00  
                   
  07/23 Existing Home Sales 07:00 Jun 5.32m 5.27m 5.34m 5.36m  
                   
  07/23 Existing Home Sales MoM 07:00 Jun -0.40% -1.70% 2.50% 2.90%  
                   
  07/24 MBA Mortgage Applications 04:00 19 Jul - -1.90% -1.10% -  
                   
  07/24 Markit US Manufacturing PMI 06:45 Jul P 51.00 50.00 50.60 -  
                   
  07/24 Markit US Services PMI 06:45 Jul P 51.80 52.20 51.50 -  
                   
  07/24 Markit US Composite PMI 06:45 Jul - 51.60 51.50 -  
                   
  07/24 New Home Sales 07:00 Jun 658k 646k 626k 604k  
                   
  07/24 New Home Sales MoM 07:00 Jun 5.10% 7.00% -7.80% -8.20%  
                   
  07/25 Durable Goods Orders 05:30 Jun P -0.80% - -1.30% -  
                   
  07/25 Durables Ex Transportation 05:30 Jun P 0.20% - 0.40% -  
                   
  07/25 Initial Jobless Claims 05:30 20 Jul 218k - 216k -  
                   
  07/25 Continuing Claims 05:30 13 Jul 1688k - 1686k -  
                   
  07/25 Wholesale Inventories MoM 05:30 Jun P 0.50% - 0.40% -  
                   
  07/25 Bloomberg Consumer Comfort 06:45 21 Jul - - 64.70 -  
                   
  07/25 Kansas City Fed ManfActivity 08:00 Jul 3.00 - 0.00 -  
                   
  07/26 GDP Annualized QoQ 05:30 2Q A 1.80% - 3.10% -  
                   
  07/26 Personal Consumption 05:30 2Q A 4.00% - 0.90% -  
                   
  07/26 GDP Price Index 05:30 2Q A 2.00% - 0.90% -  
                   
  07/26 Core PCE QoQ 05:30 2Q A 2.00% - 1.20% -
                   
 
 
 
 
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