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Market Commentary


 
Today's Coupons
 
  10-Year Notes   101-13.5 (-01.5)  
 
  FN 3.5% Coupon   102-28.5 (+02)  
 
  Support   3.237%  
 
  Resistance   1.457%  
 
 
 
 
Wednesday, September 04, 2019
 
 
Treasury Yields Rise with Stocks as Risks Recede
 
 
Market opened today’s session with treasuries nudging lower across all maturities. 10-Year Treasury yield is at 1.4741, 1.68 bps increased from prior closing of 1.4573.

Earlier Tuesday, Trump suggested he could take even more drastic action to “crack down” on China’s trade practices without a new trade agreement in place, if he wins the reelection next year. The trade war has contributed to investor concerns about a global economic slowdown, however, concern over the falling yields and the trade dispute seemed to have temporarily disappeared. The Dow Jones traded 226 points higher, putting the Dow on track for its strongest weekly gain in 10 weeks; the Dow, S&P 500, and Nasdaq are all on pace to break a string of four consecutive losing weeks. Negotiators from the US and China are supposed to be meeting in September, although they have not set a specific date. Traders rushed back into riskier assets as global event risks seemed to recede which caused gold to decrease 0.60% to $1,538.69 an ounce and West Texas Intermediate crude oil to advance 2.40% to $55.21 a barrel. The yield on 10-Year Treasuries increased 4 basis points to 1.50%, while the yield on 2-Year Treasuries climbed 2 basis points to 1.47%. The US Treasury will offer $40 billion and $55 billion at its weekly auction of 8-week and 4-week bills, respectively.

Reports show the trade deficit narrowed to $54.00 billion in July from $55.50 billion in the prior month. However, imports growth is likely to surge as companies stockpile goods before the holiday season while exports are weakened in the remainder of the quarter, which will widen the trade deficit. Growth in both exports and imports decelerated a considerable amount since last year; exports growth peaked at 11.00% in May 2018 and imports growth peaked at 10.00% in September. Although there was a 2.60% decline in capital goods imports, consumer goods imports increased 1.10%, which indicated strength, if not growth, in consumer spending. Data from a US Commerce Department report, reviewing international travel and tourism to the US, showed visitors spent $17.68 billion in July compared to $17.75 billion a year earlier. The report also revealed that tourists from the US spent $12.53 billion abroad in July compared to the prior year’s $11.90 billion.

The curve has bear-steepened with UST 10-Year yield up 1.68 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  09/03 Markit US Manufacturing PMI 06:45 Aug F 50.00 50.30 49.90 -  
                   
  09/03 ISM Manufacturing 07:00 Aug 51.30 49.10 51.20 -  
                   
  09/03 ISM Prices Paid 07:00 Aug 46.80 46.00 45.10 -  
                   
  09/03 Construction Spending MoM 07:00 Aug 0.30% 0.10% -1.30% -0.70%  
                   
  09/04 MBA Mortgage Applications 04:00 30 Aug - -3.10% -6.20% -  
                   
  09/04 Trade Balance 05:30 Jul -$53.40b -$54.00b -$55.20b -$55.50b  
                   
  09/04

U.S. Federal Reserve Releases Beige

Book

11:00 - - - - -  
                   
  09/05 Challenger Job Cuts YoY 04:30 Aug - - 43.20% -  
                   
  09/05 ADP Employment Change 05:15 Aug 148k - 156k -  
                   
  09/05 Nonfarm Productivity 05:30 2Q F 2.20% - 2.30% -  
                   
  09/05 Unit Labor Costs 05:30 2Q F 2.40% - 2.40% -  
                   
  09/05 Initial Jobless Claims 05:30 31 Aug 215k - 215k -  
                   
  09/05 Continuing Claims 05:30 24 Aug 1688k - 1698k -  
                   
  09/05 Bloomberg Consumer Comfort 06:45 1 Sep - - 62.50 -  
                   
  09/05 Markit US Services PMI 06:45 Aug F 50.90 - 50.90 -  
                   
  09/05 Markit US Composite PMI 06:45 Aug F - - 50.90 -  
                   
  09/05 Factory Orders 07:00 Jul 1.00% - 0.60% -  
                   
  09/05 Durable Goods Orders 07:00 Jul F 2.10% - 2.10% -  
                   
  09/05 Durables Ex Transportation 07:00 Jul F -0.40% - -0.40% -  
                   
  09/06 Change in Nonfarm Payrolls 05:30 Aug 160k - 164k -  
                   
  09/06 Unemployment Rate 05:30 Aug 3.70% - 3.70% -  
                   
  09/06 Average Hourly Earnings MoM  05:30 Aug 0.30% - 0.30% -  
                   
  09/06 Average Hourly Earnings YoY 05:30 Aug 3.00% - 3.20% -  
                   
  09/06 Labor Force Participation Rate 05:30 Aug - - 63.00% -
                   
 
 
 
 
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