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Market Commentary


 
Today's Coupons
 
  10-Year Notes   98-00 (+15)  
 
  FN 3.5% Coupon   102-08 (+04)  
 
  Support   3.237%  
 
  Resistance   1.457%  
 
 
 
 
Monday, September 16, 2019
 
 
Treasury Yields Decline After Drone Strikes on Saudi Oil
 
 
Market opened today’s session with treasuries rallying across all maturities. 10-Year Treasury yield is at 1.8695, 2.63 bps decreased from prior closing of 1.8958.

The Dow Jones slipped 70 points shortly after falling more than 100 points, the first decline in 9 days for the Dow. The S&P 500 and Nasdaq pulled back 0.30% and 0.50%, respectively. The decline came amid fears that the attack in Saudi Arabia could slow down global economic growth. Oil prices soared after Saudi Arabia’s oil facilities were damaged in a coordinated attack, forcing the kingdom to cut its oil output in half. The attack on the facilities at the Abqaiq and Khurais oil fields, destroyed about 5.7 million barrels of daily crude production, which is about 50% of the kingdom’s oil output. Saudi Aramco, the national oil company, hopes to restore about 2 million barrels today. Oil prices tapered after the US announced it would release oil from the Strategic Petroleum Reserve to keep the markets “well-supplied” and ease pressure on the global economy. West Texas Intermediate crude oil advanced 10.20% to $60.46 a barrel. The yield on 10-year Treasuries sank 6 basis points to 1.84% and the yield on 2-Year Treasuries dipped 4 basis points to 1.76%. Today, the US Treasury will auction $45 billion and $42 billions in 3-month and 6-month bills, respectively.

Treasuries rallied and investors looked for a safer commodity; Gold climbed 1.00% to $1,503.41 an ounce and Silver advanced 2.20% to $17.83 an ounce. The New York Fed’s Empire State Survey for September detailed a drop in manufacturing, from 4.8 to 2, as readings for new orders and shipments crumbled; US manufacturing has shown a growing weakness amid trade tensions with China. The measure of capital spending dropped the most in three years, to 4.6 from 23.2. The Institute for Supply Management’s purchasing manager index narrowed in August for the first time since 2016 as the benchmark for new orders dropped to a seven-year low. The report was released two days before The Federal Open Market Committee is scheduled to meet on Tuesday and Wednesday to discuss the possibility of lowering interest rates in response to “slowing economic growth and muted inflation”, in an attempt to protect the longest-ever US economic expansion; Chairman Jerome Powell will hold a post-decision press conference Wednesday.

The curve has bull-steepened with UST 10-Year yield down 2.63 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  09/16 Empire Manufacturing 05:30 Sep 4.00 2.00 4.80 -  
                   
  09/17 Industrial Production MoM 06:15 Aug 0.20% - -0.20% -  
                   
  09/17 Capacity Utilization 06:15 Aug 77.60% - 77.50% -  
                   
  09/17 NAHB Housing Market Index 07:00 Sep 66.00 - 66.00 -  
                   
  09/17 Net Long-term TIC Flows 13:00 Jul - - $99.10b -  
                   
  09/17 Total Net TIC Flows 13:00 Jul - - $1.70b -  
                   
  09/18 MBA Mortgage Applications 04:00 13 Sep - - 2.00% -  
                   
  09/18 Housing Starts 05:30 Aug 1250k - 1191k -  
                   
  09/18 Housing Starts MoM 05:30 Aug 5.00% - -4.00% -  
                   
  09/18 Building Permits 05:30 Aug 1300k - 1336k 1317k  
                   
  09/18 Building Permits MoM 05:30 Aug -1.30% - 8.40% 6.90%  
                   
  09/18 FOMC Rate Decision (Upper Bound) 11:00 18 Sep 2.00% - 2.25% -  
                   
  09/18 FOMC Rate Decision (Lower Bound) 11:00 18 Sep 1.75% - 2.00% -  
                   
  09/19 Philadelphia Fed Business Outlook 05:30 Sep 10.00 - 16.80 -  
                   
  09/19 Initial Jobless Claims 05:30 14 Sep 213k - 204k -  
                   
  09/19 Continuing Claims 05:30 7 Sep 1670k - 1670k -  
                   
  09/19 Bloomberg Consumer Comfort 06:45 15 Sep - - 63.20 -  
                   
  09/19 Leading Index 07:00 Aug -0.10% - 0.50% -  
                   
  09/19  Existing Home Sales 07:00 Aug 5.37m - 5.42m -  
                   
  09/19 Existing Home Sales MoM 07:00 Aug -0.90% - 2.50% -  
                   
  09/20 No Data - - - - - -
                   
 
 
 
 
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