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Market Commentary


 
Today's Coupons
 
  10-Year Notes   99-08 (-19.5)  
 
  FN 3.5% Coupon   102-15.5 (-04)  
 
  Support   3.237%  
 
  Resistance   1.610%  
 
 
 
 
Tuesday, August 13, 2019
 
 
Treasury Yields Rise as Yield Curve Flattens
 
 
Market opened today’s session with treasuries inching lower across all maturities. 10-Year Treasury yield is at 1.6915, 4.61 bps increased from prior closing of 1.6454.

US stocks slid for a third straight day after the core CPI rose above consensus, indicating inflation may be firming. Meanwhile, the spread between the most widely watched 2-year and 10-year yields narrowed to the lowest since 2007, flashing maybe the biggest recession signal yet in recent years and also denting arguments for interest rate cuts. Already-fragile market sentiment continued to be under pressure as the violent protests in Hong Kong and a crash in Argentine peso persisted. With the prospect of a trade resolution continues to deteriorate, Singapore’s government cut its forecast for economic growth for 2019 to almost zero. China again fixed its yuan at 7.0326 per dollar for the fourth consecutive session. In corporate news, many companies that are scheduled to release their quarterly results this week include Alibaba, Cisco, Walmart, Nvidia, and Prudential. Elsewhere, WTI crude gained above $56 a barrel this morning.

NFIB Small Business Optimism in July climbed to 104.70 from 103.30 prior vs. 104.00 consensus. The headline CPI in July came in line with consensus of 0.30%, following 0.10% in June. The core remained unchanged from prior of 0.30%, above 0.20% consensus. The YoY change for both the headline and the core edged higher to 1.80% and 2.20% from 1.60% and 2.10% prior, respectively. Later today, the US Treasury is scheduled to auction off $28 billion of 52-week bills.

The curve has bear-flattened with UST 10-Year yield up 4.61 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  08/12 Monthly Budget Statement 11:00 Jul -$120.00b - -$76.90b -  
                   
  08/13 NFIB Small Business Optimism 03:00 Jul 104.00 104.70 103.30 -  
                   
  08/13 CPI MoM 05:30 Jul 0.30% 0.30% 0.10% -  
                   
  08/13 CPI YoY 05:30 Jul 1.70% 1.80% 1.60% -  
                   
  08/14 MBA Mortgage Applications 04:00 9 Aug - - 5.30% -  
                   
  08/14 Import Price Index MoM 05:30 Jul -0.10% - -0.90% -  
                   
  08/14 Import Price Index YoY 05:30 Jul -2.00% - -2.00% -  
                   
  08/14 Export Price Index MoM 05:30 Jul -0.10% - -0.70% -  
                   
  08/14 Export Price Index YoY 05:30 Jul - - -1.60% -  
                   
  08/15 Empire Manufacturing 05:30 Aug 2.00 - 4.30 -  
                   
  08/15 Nonfarm Productivity 05:30 2Q P 1.40% - 3.40% -  
                   
  08/15 Unit Labor Costs 05:30 2Q P 1.90% - -1.60% -  
                   
  08/15 Philadelphia Fed Business Outlook 05:30 Aug 9.50 - 21.80 -  
                   
  08/15 Retail Sales Advance MoM 05:30 Jul 0.30% - 0.40% -  
                   
  08/15 Initial Jobless Claims 05:30 10 Aug 213k - 209k -  
                   
  08/15 Continuing Claims 05:30 3 Aug 1685k - 1684k -  
                   
  08/15 Industrial Production MoM 06:15 Jul 0.10% - 0.00% -  
                   
  08/15 Capacity Utilization 06:15 Jul 77.80% - 77.90% -  
                   
  08/15 Bloomberg Consumer Comfort 06:45 11 Aug - - 62.90 -  
                   
  08/15 NAHB Housing Market Index 07:00 Aug 65.00 - 65.00 -  
                   
  08/15 Net Long-term TIC Flows 13:00 Jun - - $3.50b -  
                   
  08/15 Total Net TIC Flows 13:00 Jun - - $32.90b -  
                   
  08/16 Housing Starts 05:30 Jul 1255k - 1253k -  
                   
  08/16 Housing Starts MoM 05:30 Jul 0.20% - -0.90% -  
                   
  08/16 Building Permits 05:30 Jul 1270k - 1220k 1232k  
                   
  08/16 Building Permits MoM 05:30 Jul 3.10% - -6.10% -5.20%  
                   
  08/16 U. of MichSentiment 07:00 Aug P 97.00 - 98.40 -
                   
 
 
 
 
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