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Market Commentary


 
Today's Coupons
 
  10-Year Notes   97-25 (-23)  
 
  FN 3.5% Coupon   102-06.5 (-04)  
 
  Support   3.237%  
 
  Resistance   1.457%  
 
 
 
 
Friday, September 13, 2019
 
 
Treasury Yields Surge as Trade Tensions Ease
 
 
Market opened today’s session with treasuries lower across all maturities. 10-Year Treasury yield is at 1.8519, 8.04 bps increased from prior closing of 1.7715.

Stocks opened higher amid improving views around US-China trade relations, with the Dow and S&P 500 on the brink of registering record highs. The Dow, which traded 121 points higher at the open, is on track to surpassing a record high of 27,398.68. The S&P 500, also showing solid gains, is closing in on its previous record of 3,027.98 points after news broke about an interim trade agreement under consideration by the US. The Chinese Ministry of Commerce said it will exempt US agricultural products, such as soybeans and pork, from additional tariffs; the exemption will be valid for a year through September 16, 2020. The yield on 2-Year Treasuries rose 3 basis points to 1.75%, the highest in more than six weeks. And the yield on 10-Year Treasuries climbed 6 basis points to 1.83%, reaching the highest in 6 weeks on its 8th straight advance. Gold climbed 0.30% to $1,504.48 an ounce, the highest in a week. West Texas Intermediate crude oil increased 0.10% to $55.16 a barrel. The US Treasury will auction $45 billion and $42 billion in 3-month and 6-month bills, respectively.

Consumer spending remained strong during trade tensions, with retail sales rising 0.40% in August and online sales at the highest in almost 20 years. Auto sales increased 1.80% with 16.97 million units in August. Retail gasoline prices fell 4.30% in August with sales decreasing 0.90% due to lower prices. Clothing and restaurant sales declined while building materials gained, however this could have shifted due to Hurricane Dorian. Clothing fell 0.90% from an increase of 1.30% prior, while food services and drink establishments dropped 1.20% compared to a prior rise of 0.60%. Building materials gained 1.40% after July reported 1.00%. The decline in dining numbers, and rise in building materials, coincides with the arrival of Hurricane Dorian. The University of Michigan Consumer Sentiment Report showed concerns about tariffs on the economy rose, with 38.00% of respondents making references to the negative impact. The report also reflected consumer expectations for Democrats fell to one of the lowest levels on record, and the weakest since monthly readings began in early 2017.

The curve has bear-steepened with UST 10-Year yield up 8.04 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  09/09 Consumer Credit 12:00 Jul $16.000b - $14.569b -  
                   
  09/10 NFIB Small Business Optimism 03:00 Aug 103.50 103.10 104.70 -  
                   
  09/10 JOLTS Job Openings 07:00 Jul 7331 7217 7348 7248  
                   
  09/11 MBA Mortgage Applications 04:00 6 Sep - 0.20% -3.10% -  
                   
  09/11 PPI Final Demand MoM 05:30 Aug 0.00% 0.10% 0.20% -  
                   
  09/11 PPI Final Demand YoY 05:30 Aug 1.70% 1.80% 1.70% -  
                   
  09/11 Wholesale Trade Sales MoM 07:00 Jul - 0.30% -0.30% -  
                   
  09/11 Wholesale Inventories MoM 07:00 Jul F 0.20% 0.20% 0.20% -  
                   
  09/12 CPI MoM 05:30 Aug 0.10% 0.10% 0.30% -  
                   
  09/12 CPI YoY 05:30 Aug 1.80% 1.70% 1.80% -  
                   
  09/12 Initial Jobless Claims 05:30 7 Sep 215k 204k 217k 219k  
                   
  09/12 Continuing Claims 05:30 31 Aug 1675k 1670k 1662k 1674k  
                   
  09/12 Bloomberg Consumer Comfort 06:45 8 Sep - 63.20 63.40 -  
                   
  09/12 Monthly Budget Statement 11:00 Aug -$200.00b - -$214.10b -  
                   
  09/13 Import Price Index MoM 05:30 Aug -0.50% -0.50% 0.20% 0.10%  
                   
  09/13 Import Price Index YoY 05:30 Aug -2.00% -2.00% -1.80% -1.90%  
                   
  09/13 Export Price Index MoM 07:00 Aug -0.30% -0.60% 0.20% -  
                   
  09/13 Export Price Index YoY 05:30 Aug - -1.40% -0.90% -  
                   
  09/13 Retail Sales Advance MoM 05:30 Aug 0.20% 0.40% 0.70% 0.80%  
                   
  09/13 U. of Mich. Sentiment 05:30 Sep P 90.80 92.00 89.80 -
                   
 
 
 
 
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