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Market Commentary


 
Today's Coupons
 
  10-Year Notes   101-10 (+18)  
 
  FN 3.5% Coupon   102-20.5 (+05.5)  
 
  Support   3.237%  
 
  Resistance   1.496%  
 
 
 
 
Tuesday, August 27, 2019
 
 
Treasury Yields Continue To Drop Amidst Trade Negotiations
 
 
Market opened today’s session with treasuries rallying across all maturities. 10-Year Treasury yield is at 1.4963, 3.88 bps decreased from prior closing of 1.5351.

Stocks rose amidst the latest developments from the US-China trade war. The Dow Jones, S&P 500, and the Nasdaq climbed after China announced measures aimed at increasing consumption, including “potentially removing car-buying restrictions”. The recent escalation in the US-China trade relations has dented stocks this month; the major averages came into Tuesday’s session down more than 3% each in August. Due to slower growth and the tension surrounding the trade negotiations, the dollar was driven higher and treasury yields were driven lower. The yield on 10-Year Treasury declined two basis points and the yield on 2-year Treasuries fell one basis point. Auctions will be held for $40 billion in 2-year Treasury notes, $41 billion in 5-year notes and $32 billion in 7-year notes. As trade negotiations continue, Gold inched above $1,530 an ounce and West Texas Intermediate crude climbed to $54.23 a barrel.

Hiring and income gains are keeping consumers upbeat and relieving concerns about the economy’s prospects in light of unpredictable financial markets and escalated trade tensions; continued confidence in consumers could allow for sustained household spending. The Federal Reserve Bank of Richmond’s monthly survey, for manufacturers based in the Carolina’s, the District of Columbia, Maryland, Virginia, and West Virginia, showed steady improvement for overall business activity. The new orders index rose to 2.00 this month from -18.00 in July and the shipments index rose to 5.00 from -13.00. The Richmond Fed district accounts for about 9.10 percent of the nation’s gross domestic product.

The curve has bull-flattened with UST 10-Year yield down 3.88 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% 0.20% 0.10% 0.20%  
                   
  08/27 S&P CoreLogic CS 20-City MoM SA 06:00 Jun 0.10% 0.04% 0.14% 0.13%  
                   
  08/27 S&P CoreLogic CS 20-City YoY NSA 06:00 Jun 2.30% 2.13% 2.39% 2.37%  
                   
  08/27 Richmond Fed ManufactIndex 07:00 Aug -4.00 1.00 -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 214k - 209k -  
                   
  08/29 Continuing Claims 05:30 17 Aug 1687k - 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 92.40 - 92.10 -
                   
 
 
 
 
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