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Market Commentary


 
Today's Coupons
 
  10-Year Notes   104-15.5 (+09)  
 
  FN 3.5% Coupon   102-23.5 (+03)  
 
  Support   3.237%  
 
  Resistance   1.835%  
 
 
 
 
Friday, August 02, 2019
 
 
Treasury Yields Lower Further after Jobs Report
 
 
Market opened today’s session with treasuries rallying across all maturities. 10-Year Treasury yield is at 1.8657, 2.78 bps decreased from prior closing of 1.8935.

US equity futures pointed to a lower open this morning as the trade outlook dimmed after President Trump threatened an additional 10% tariffs on Chinese imports yesterday. President Trump announced a new round of tariffs on roughly about $300 billion of Chinese imports in a series of tweets which will become effective on September 1st. China said it will have to take countermeasures if the US follows through. President Trump is also scheduled to make a trade announcement on the European Union later on Friday. Risk-off mood continued this morning from the muddier trade outlook and the “hawkish” rate cut from the Fed earlier this week. Treasuries maintained gains from the surge in previous session with benchmark ten-year bond yields trading near the lowest level since 2016 while the dollar also steadied. Elsewhere, WTI crude bounced back this morning, trading above $55 a barrel after its 8% slide on Thursday.

The Change in Nonfarm Payrolls in July came in just shy of 165k consensus at 164k following a downwardly revised prior of 193k. However, the overall outcome was considerably weaker in light of downward revisions and a pullback in the workweek. The YoY change in wages rose 3.20% from both prior and consensus of 3.10% which may help support the Fed’s recent stance on the trajectory of interest rates. Unemployment Rate steadied at 3.70% from the same reading in prior vs. 3.60% consensus. Trade deficit in June narrowed to $55.20 billion from revised prior of $55.30 billion vs. $54.60 billion consensus. Factory Orders in June rose 0.60% from a downwardly revised prior of -1.30% vs. 0.70% consensus. However, the headline Durable Goods Orders slightly edged lower to 1.90% from 2.00% prior and the core also declined to 1.00% from 1.20% prior. Lastly, University of Michigan Sentiment printed 98.40 vs. 98.50 consensus.

The curve has bull-flattened with UST 10-Year yield down 2.78 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  07/29 Dallas Fed ManfActivity 07:30 Jul -6.00 -6.30 -12.10 -  
                   
  07/30 Personal Income 05:30 Jun 0.40% 0.40% 0.50% 0.40%  
                   
  07/30 Personal Spending 05:30 Jun 0.30% 0.30% 0.40% 0.50%  
                   
  07/30 PCE Deflator MoM 05:30 Jun 0.10% 0.10% 0.20% 0.10%  
                   
  07/30 PCE Deflator YoY 05:30 Jun 1.50% 1.40% 1.50% 1.40%  
                   
  07/30 S&P CoreLogic CS 20-City MoM SA 06:00 May 0.20% 0.14% 0.00% 0.03%  
                   
  07/30 S&P CoreLogic CS 20-City YoY NSA 06:00 May 2.40% 2.39% 2.54% 2.53%  
                   
  07/30 Pending Home Sales MoM 07:00 Jun 0.50% 2.80% 1.10% -  
                   
  07/30 Pending Home Sales NSA YoY 07:00 Jun 0.70% -0.60% -0.80% -  
                   
  07/31 MBA Mortgage Applications 04:00 26 Jul - -1.40% -1.90% -  
                   
  07/31 ADP Employment Change 05:15 Jul 150k 156k 102k 112k  
                   
  07/31 Employment Cost index  05:30 2Q 0.70% 0.60% 0.70% -  
                   
  07/31 FOMC Rate Decision (Upper Bound) 11:00 31 Jul 2.25% - 2.50% -  
                   
  07/31 FOMC Rate Decision (Lower Bound) 11:00 31 Jul 2.00% - 2.25% -  
                   
  08/01 Challenger Job Cuts YoY 04:30 Jul - 43.20% 12.80% -  
                   
  08/01 Initial Jobless Claims 05:30 27 Jul 214k 215k 206k 207k  
                   
  08/01 Continuing Claims 05:30 20 Jul 1674k 1699k 1676k 1677k  
                   
  08/01 Bloomberg Consumer Comfort 06:45 28 Jul - 64.70 63.70 -  
                   
  08/01 Markit US Manufacturing PMI 06:45 Jul F 50.10 50.40 50.00 -  
                   
  08/01 ISM Manufacturing 07:00 Jul 52.00 51.20 51.70 -  
                   
  08/01 ISM Prices Paid 07:00 Jul 49.00 45.10 47.90 -  
                   
  08/01 Construction Spending MoM 07:00 Jun 0.30% -1.30% -0.80% -0.50%  
                   
  08/02 Change in Nonfarm Payrolls 08:00 Jul 165k 164k 224k 193k  
                   
  08/02 Unemployment Rate 05:30 Jul 3.60% 3.70% 3.70% -  
                   
  08/02 Average Hourly Earnings MoM 05:30 Jul 0.20% 0.30% 0.20% 0.30%  
                   
  08/02 Average Hourly Earnings YoY 05:30 Jul 3.10% 3.20% 3.10% -  
                   
  08/02 Labor Force Participation Rate 05:30 Jul 62.90% 63.00% 62.90% -  
                   
  08/02 Trade Balance 05:30 Jun -54.60b -$55.20b -55.50b -$55.30b  
                   
  08/02 Factory Orders 07:00 Jun 0.70% 0.60% -0.70% -1.30%  
                   
  08/02 Durable Goods Orders 07:00 Jun F - 1.90% 2.00% -  
                   
  08/02 Durables Ex Transportation 07:00 Jun F - 1.00% 1.20% -  
                   
  08/02 U. of MichSentiment 07:00 Jul F 98.50 98.40 98.40 -
                   
 
 
 
 
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