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Market Commentary


 
Today's Coupons
 
  10-Year Notes   100-17.5 (+05)  
 
  FN 3.5% Coupon   102-19 (+01.5)  
 
  Support   3.237%  
 
  Resistance   1.524%  
 
 
 
 
Thursday, August 15, 2019
 
 
Treasury Yields Slightly Lower as Risk-Off Mood Continues
 
 
Market opened today’s session with treasuries sharply advancing across all maturities. 10-Year Treasury yield is at 1.5640, 1.52 bps decreased from prior closing of 1.5792.

US stocks rebounded from one of its worst day of the year early in the morning after a slew of economic data suggested that the US economy is still in a relatively strong condition. Walmart also led the rally after posting stronger-than-expected earnings and boosting its full-year outlook. Its shares rose as much as 7% this morning. Cisco and General Electric plunged in premarket. However, the gains were erased as renewed concerns over the trade dented the mood after President Trump said any deal with China must be “on our terms”. Worries about possible economic recession continued to reverberate through markets this morning. The inverted curve between the 2-Year and 10-Year Treasury yields reversed but the spread remained fairly flat. The 30-year Treasury bond yield hit a record low, dipping below 2% for the first time at one point. Both Germany’s and Britain’s 10-Year yields also declined. Elsewhere, WTI crude dropped as a surprise gain in US crude stockpiles added to deepening concerns over the global demand outlook.

Empire Manufacturing in August climbed to 4.80 above consensus of 2.00, and Philadelphia Fed Business Outlook in August also came in above consensus of 9.50 at 16.80. The headline Retail Sales in July indicated that US economy is still on strong footing as it printed a stronger reading of 0.70% vs. 0.30% consensus following a downwardly revised prior of 0.30% despite of the ongoing trade escalation. The core also came in at 1.00% above expectation of 0.40%. However, Initial Jobless Claims slightly edged higher to 220k from an upwardly revised prior of 211k and Continuing Claims also climbed to 1726k from an upwardly revised prior of 1687k. Industrial Production in July fell to -0.20% vs. estimated 0.10% gain. Lastly, Bloomberg Consumer Comfort edged lower to 61.20 from 62.90 prior. Later today, the US Treasury is scheduled to auction off $55 billion of 4-week bills and $40 billion of 8-week bills at 8:30 AM (PT), and Net Long-Term TIC Flows and Total Net TIC Flows for June will be released at 1:00 PM (PT).

The curve has bull-steepened with UST 10-Year yield down 1.52 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 - 21.70% 5.30% -  
                   
  08/14 Import Price Index MoM 05:30 Jul -0.10% 0.20% -0.90% -1.10%  
                   
  08/14 Import Price Index YoY 05:30 Jul -2.00% -1.80% -2.00% -  
                   
  08/14 Export Price Index MoM 05:30 Jul -0.10% 0.20% -0.70% -0.60%  
                   
  08/14 Export Price Index YoY 05:30 Jul - -0.90% -1.60% -  
                   
  08/15 Empire Manufacturing 05:30 Aug 2.00 4.80 4.30 -  
                   
  08/15 Nonfarm Productivity 05:30 2Q P 1.40% 2.30% 3.40% 3.50%  
                   
  08/15 Unit Labor Costs 05:30 2Q P 2.00% 2.40% -1.60% 5.50%  
                   
  08/15 Philadelphia Fed Business Outlook 05:30 Aug 9.50 16.80 21.80 -  
                   
  08/15 Retail Sales Advance MoM 05:30 Jul 0.30% 0.70% 0.40% 0.30%  
                   
  08/15 Initial Jobless Claims 05:30 10 Aug 212k 220k 209k 211k  
                   
  08/15 Continuing Claims 05:30 3 Aug 1685k 1726k 1684k 1687k  
                   
  08/15 Industrial Production MoM 06:15 Jul 0.10% -0.20% 0.00% 0.20%  
                   
  08/15 Capacity Utilization 06:15 Jul 77.80% 77.50% 77.90% 77.80%  
                   
  08/15 Bloomberg Consumer Comfort 06:45 11 Aug - 61.20 62.90 -  
                   
  08/15 NAHB Housing Market Index 07:00 Aug 65.00 66.00 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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