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Market Commentary


 
Today's Coupons
 
  10-Year Notes   101-0.5 (+03.5)  
 
  FN 3.5% Coupon   102-20.5 (00)  
 
  Support   3.237%  
 
  Resistance   1.511%  
 
 
 
 
Monday, August 26, 2019
 
 
Treasury Yields Lower Amid Twists in Trade War
 
 
Market opened today’s session with treasuries rallying across all maturities. 10-Year Treasury yield is at 1.5114, 2.37 bps decreased from prior closing of 1.5351.

In the midst of the US-China trade war, the dollar strengthened and 10-Year Treasury yields held close to a three-year low. The Dow traded 120 points higher, S&P 500 rose, and the Nasdaq advanced after Trump remarked US and China are “getting back to the negotiating table”. Gold futures eased after reaching highest since 2013. Bullion futures advanced 0.10% to $1,539.60 an ounce at 6:34 AM (PT) on the Comex in New York, after surging as much as 1.80%. Gold jumped Friday and the global stocks plunged as the world’s two largest economies imposed tariff increases. Gold has surged this year as the trade fight hurts the economic outlook, boosting odds of more US rate cuts from the Federal Reserve. The US Treasury announced that it will auction $45b in 3-month bills and $42b in 6-month bills today, August 26th.

The Chicago Fed US National Activity Index for July was -0.36 versus 0.03 in June. A reading below zero indicates ‘below-trend-growth’ in the economy and a sign of easing pressures on future inflation. Dallas Fed Factory Index showed an improvement from the previous three months. According to the Federal Reserve Bank of Dallas, factory activity in Texas registered the 3rd consecutive negative reading in July. Registering at -6.30, an improvement from June’s -12.10 reading, the General Business Activity score showed a weakness in delivery times, unfilled orders, and prices received, and the outlook for manufacturers. US July Durable Goods Orders rose 2.10% due to a surge in civilian aircraft orders. Boeing Co. stated it received 31 orders in July, the most in 4 months. US sales of business equipment fell the most since 2016. The lack of sales in equipment suggested American businesses remain cautious about capital spending ahead of this month’s escalation of the US - China trade war.

The curve has bull-flattened with UST 10-Year yield down 2.37 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  08/26 Chicago Fed Nat Activity Index 05:30 Jul - -0.36 -0.02 -0.03  
                   
  08/26 Durable Goods Orders 05:30 Jul P 1.20% 2.10% 1.90% 1.80%  
                   
  08/26 Durables Ex Transportation 05:30 Jul P 0.00% -0.40% 0.10% 0.80%  
                   
  08/26 Dallas Fed ManfActivity 07:30 Aug -4.00 2.70 -6.30 -  
                   
  08/27 FHFA House Price Index MoM 06:00 Jun 0.20% - 0.10% -  
                   
  08/27 S&P CoreLogic CS 20-City MoM SA 06:00 Jun 0.10% - 0.14% -  
                   
  08/27 S&P CoreLogic CS 20-City YoY NSA 06:00 Jun 2.30% - 2.39% -  
                   
  08/27 Richmond Fed ManufactIndex 07:00 Aug -2.00 - -12.00 -  
                   
  08/28 MBA Mortgage Applications 04:00 23 Aug - - -0.90% -  
                   
  08/29 GDP Annualized QoQ 05:30 2Q S 2.00% - 2.10% -  
                   
  08/29 Personal Consumption 05:30 2Q S 4.30% - 4.30% -  
                   
  08/29 GDP Price Index 05:30 2Q S 2.40% - 2.40% -  
                   
  08/29 Core PCE QoQ 05:30 2Q S 1.80% - 1.80% -  
                   
  08/29 Wholesale Inventories MoM 05:30 Jul P 0.20% - 0.00% -  
                   
  08/29 Initial Jobless Claims 05:30 24 Aug 215k - 209k -  
                   
  08/29 Continuing Claims 05:30 17 Aug - - 1674k -  
                   
  08/29 Bloomberg Consumer Comfort 06:45 25 Aug - - 61.50 -  
                   
  08/29 Pending Home Sales MoM 07:00 Jul 0.00% - 2.80% -  
                   
  08/29 Pending Home Sales NSA YoY 07:00 Jul 1.80% - -0.60% -  
                   
  08/30 Personal Income 05:30 Jul 0.30% - 0.40% -  
                   
  08/30 Personal Spending 05:30 Jul 0.50% - 0.30% -  
                   
  08/30 PCE Deflator MoM 05:30 Jul 0.20% - 0.10% -  
                   
  08/30 PCE Deflator YoY 05:30 Jul 1.40% - 1.40% -  
                   
  08/30 U. of MichSentiment 07:00 Aug F 92.30 - 92.10 -
                   
 
 
 
 
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