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Market Commentary


 
Today's Coupons
 
  10-Year Notes   101-02.5 (+02.5)  
 
  FN 3.5% Coupon   102-23 (+02)  
 
  Support   3.237%  
 
  Resistance   1.471%  
 
 
 
 
Friday, August 30, 2019
 
 
Treasury Yields Rise As Rocky Month Closes
 
 
Market opened today’s session with treasuries nudging lower across all maturities. 10-Year Treasury yield is at 1.5095, 1.5 bps increased from prior closing of 1.4945.

While the new tariffs are supposed to commence Sunday, stocks rose and the US and China showed an eagerness to resolve their trade dispute. The Dow Jones traded 0.60% higher, the S&P 500 climbed 0.50%, and the Nasdaq inched 0.40% higher. In total, the Dow and S&P 500 were both down nearly 2%, while the Nasdaq had lost around 2.50%. The yield on the 10-Year Treasuries gained two basis points to 1.52% and the yield on the 2-Year treasuries rose one basis point to 1.53%. Overall, the 10-year Treasury note took a hit this month as it fell below the 2-Year rate, causing some fear as it has previously preceded periods of recession in the US. Treasuries stayed lower and the dollar slipped after a key measure of inflation came in as expected. Due to this month’s volatility, investors “loaded up” on traditionally safer assets such as gold and silver. The SPDR Gold Trust climbed more than 8% in August while the iShares Silver Trust soared 12.20%.The US Treasury will auction $54b in 3-month bills, and $42b in 6-month bills on September 3rd.

The US economy slowed in the spring and is expected to weaken further in the months ahead; however, consumer spending remains active enough to keep the economy growing steadily. The nation’s gross domestic product grew at an annual rate of 2.00% in the April-June quarter, which was down from a 3.10% growth rate in the first quarter and would have been even weaker had it not been for an increase in consumer demand. Consumer spending, which accounts for about 70% of economic growth, increased in the April-June quarter to a surprising annual rate of 4.70%, its fastest pace in nearly five years. Personal income growth produced a significantly weaker advance than spending, showing only a 0.10% gain. At the same time, business investments are weakening due to the uncertainties created by the taxes which Trump has imposed on import-goods that many businesses rely on.

The curve has bear-steepened with UST 10-Year yield up 1.5 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 - -6.20% -0.90% -  
                   
  08/29 GDP Annualized QoQ 05:30 2Q S 2.00% 2.00% 2.10% -  
                   
  08/29 Personal Consumption 05:30 2Q S 4.30% 4.70% 4.30% -  
                   
  08/29 GDP Price Index 05:30 2Q S 2.40% 2.40% 2.40% -  
                   
  08/29 Core PCE QoQ 05:30 2Q S 1.80% 1.70% 1.80% -  
                   
  08/29 Wholesale Inventories MoM 05:30 Jul P 0.20% 0.20% 0.00% -  
                   
  08/29 Initial Jobless Claims 05:30 24 Aug 214k 215k 209k 211k  
                   
  08/29 Continuing Claims 05:30 17 Aug 1686k 1698k 1674k 1676k  
                   
  08/29 Bloomberg Consumer Comfort 06:45 25 Aug - 62.50 61.50 -  
                   
  08/29 Pending Home Sales MoM 07:00 Jul 0.00% -2.50% 2.80% -  
                   
  08/29 Pending Home Sales NSA YoY 07:00 Jul 1.80% 1.70% -0.60% -  
                   
  08/30 Personal Income 05:30 Jul 0.30% 0.10% 0.40% 0.50%  
                   
  08/30 Personal Spending 05:30 Jul 0.50% 0.60% 0.30% -  
                   
  08/30 PCE Deflator MoM 05:30 Jul 0.20% 0.20% 0.10% -  
                   
  08/30 PCE Deflator YoY 05:30 Jul 1.40% 1.40% 1.40% 1.30%  
                   
  08/30 U. of MichSentiment 07:00 Aug F 92.40 89.80 92.10 -
                   
 
 
 
 
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