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Market Commentary


 
Today's Coupons
 
  10-Year Notes   99-20 (+12)  
 
  FN 3.5% Coupon   102-15 (00)  
 
  Support   3.237%  
 
  Resistance   1.457%  
 
 
 
 
Tuesday, September 24, 2019
 
 
Treasury Yields Decline with Consumer Confidence
 
 
Market opened today’s session with treasuries rallying across all maturities. 10-Year Treasury yield is at 1.6714, 5.53 bps decreased from prior closing of 1.7267.

Stocks rise as optimism around US-China trade negotiations increase. The Dow and S&P 500 were more than 1.00% below their all-time highs while the Nasdaq Composite was 2.70% away from reaching its record. The Chinese granted new waivers to several companies exempting them from tariffs on at least 2 million tons of US soybeans, of which, some companies have already purchased approximately 1.2 million tons of soybeans. After a Chinese delegation left the US earlier than planned, The US Treasury Secretary confirmed that trade talks between the US and China would resume next month and negotiators have already made some progress in last week’s deputy-level meetings. Oil prices fell as Saudi Arabia showed signs of making progress in restoring lost output following a drone attack on its facilities. West Texas Intermediate crude oil dipped 1.10% to $58.01 a barrel. The yield on ten-year Treasuries sank three basis points to 1.70% and the yield on two-year Treasuries declined one basis point to 1.67%. The US Treasury will offer $40 billion at its monthly auction of two-year notes, the same as the last offering.

James Bullard, President of the Federal Reserve Bank of St. Louis, stated the central bank may need to “ease monetary policy further to offset downside risks from trade conflicts and too-low inflation”. Chicago Federal Reserve Bank President, Charles Evans, will discuss the economic outlook and monetary policy in Illinois on Wednesday. The next pending tariff action will be the escalation of 25% tariffs to 30% on October 15th, the next Fed decision is on October 30th. Fed Chair, Jerome Powell, commented that there may be a “willingness for more aggressive action”, which would largely depend on the tone of trade negotiations. The Conference Board Consumer Confidence Index decreased in September to 125.10, down from 134.20 in August. The Present Situation Index, which is based on consumers assessment of current business and labor market conditions, decreased 7 points to 169.00, from 176.00. The Expectations Index, which is based on consumers short-term outlook for income, business, and labor market conditions, declined from 106.40 last month to 95.80 this month.

The curve has bull-flattened with UST 10-Year yield down 5.53 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  09/23 Chicago Fed Nat Activity Index 05:30 Aug -0.03 0.10 -0.36 -0.41  
                   
  09/23 Markit US Manufacturing PMI 06:45 Sep P 50.40 51.00 50.30 -  
                   
  09/23 Markit US Services PMI 06:45 Sep P 51.40 50.90 50.70 -  
                   
  09/23 Markit US Composite PMI 06:45 Sep P - 51.00 50.70 -  
                   
  09/24 FHFA House Price Index MoM 06:00 Jul 0.30% 0.40% 0.20% -  
                   
  09/24 S&P CoreLogic CS 20-City MoM SA 06:00 Jul 0.10% 0.02% 0.04% 0.06%  
                   
  09/24 S&P CoreLogic CS 20-City YoY NSA 06:00 Jul 2.10% 2.00% 2.13% 2.16%  
                   
  09/24 Richmond Fed Manufact. Index 07:00 Sep 1.00 -9.00 1.00 -  
                   
  09/25 MBA Mortgage Applications 04:00 20 Sep - - -0.10% -  
                   
  09/25 New Home Sales 07:00 Aug 658k - 635k -  
                   
  09/25 New Home Sales MoM 07:00 Aug 3.60% - -12.80% -  
                   
  09/26 GDP Annualized QoQ 05:30 2Q T 2.00% - 2.00% -  
                   
  09/26 Personal Consumption 05:30 2Q T 4.70% - 4.70% -  
                   
  09/26 GDP Price Index 05:30 2Q T 2.40% - 2.40% -  
                   
  09/26 Core PCE QoQ 05:30 2Q T 1.70% - 1.70% -  
                   
  09/26 Wholesale Inventories MoM 05:30 Aug P 0.10% - 0.20% -  
                   
  09/26 Initial Jobless Claims 05:30 21 Sep 212k - 208k -  
                   
  09/26 Continuing Claims 05:30 14 Sep 1666k - 1661k -  
                   
  09/26 Bloomberg Consumer Comfort 06:45 22 Sep - - 62.70 -  
                   
  09/26 Pending Home Sales MoM 07:00 Aug 1.00% - -2.50% -  
                   
  09/26 Pending Home Sales NSA YoY 07:00 Aug 1.30% - 1.70% -  
                   
  09/27 Personal Income 05:30 Aug 0.40% - 0.10% -  
                   
  09/27 Durable Goods Orders 05:30 Aug P -1.20% - 2.00% -  
                   
  09/27 Personal Spending 05:30 Aug 0.30% - 0.60% -  
                   
  09/27 Durables Ex Transportation 05:30 Aug P 0.20% - -0.40% -  
                   
  09/27 PCE Deflator MoM 05:30 Aug 0.10% - 0.20% -  
                   
  09/27 PCE Deflator YoY 05:30 Aug 1.40% - 1.40% -  
                   
  09/27 U. of Mich. Sentiment 07:00 Sep F 92.10 - 92.00 -
                   
 
 
 
 
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