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Market Commentary


 
Today's Coupons
 
  10-Year Notes   100-25.5 (+17.5)  
 
  FN 3.5% Coupon   102-23 (+01)  
 
  Support   3.237%  
 
  Resistance   1.457%  
 
 
 
 
Thursday, October 03, 2019
 
 
Treasury Yields Lower Amid US-EU Trade Tension
 
 
Market opened today’s session with treasuries rallying across all maturities. 10-Year Treasury yield is at 1.5103, 8.89 bps decreased from prior closing of 1.5992.

US stock futures pointed to a lower open this morning as investors fear economy is slowing. The Dow Jones indicated a loss of 71 points at the open. The S&P 500 and Nasdaq 100 futures also pointed to declines. This comes after the Institute for Supply Management published a report showing its weakest reading on the manufacturing sector in more than 10 years. The ISM is scheduled to release its non-manufacturing report today. Renewed trade tensions between the US and the European Union provoked fears of a GDP downturn in the US. Starting October 18th, the US plans to widen its combative trade policy with 10% tariffs on European-made Airbus planes, 25% tariffs on coffee and certain tools and machinery from Germany, and 25% duties on French wine, Scotch and Irish whiskies, along with cheese from across the continent. This decision comes after the World Trade Organization approved the United States request to impose tariffs on $7.5 billion worth of European goods; the EU has stated it will retaliate against US tariffs. The US Treasury will offer $45 billion and $40 billion at its weekly auction of four-week and eight-week bills, respectively. The yield on 10-Year Treasuries dipped two basis points to 1.58%.

According to a report released by the Labor Department, jobless claims rose by about 4,000 to 219,000, the week of September 28th. The GM strike, which began September 15th, may have pushed up the number of people seeking benefits, other industries and firms may have also felt the impact with about 46,000 union employees on strike across several states. Although striking workers are generally not entitled to receive unemployment benefits, they are still eligible to file; state data reflects that the strike is boosting filings. Ohio saw the biggest increase in claims last week, with 2,179. The prior week, the largest increase was in Michigan, where claims surged by 4,258 to 7,831 on manufacturing and industry layoffs. State claims showed 16 states and territories reporting increased claims, while 37 reported lower filings for unemployment benefits. Michigan and Kansas led states and territories with increased claims, while New York and Georgia led those reporting fewer. The unemployment rate among people eligible for benefits stayed at 1.10%.

The curve has bull-steepened with UST 10-Year yield down 8.89 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  09/30 Dallas Fed ManfActivity 07:30 Sep 1.00 1.50 2.70 -  
                   
  10/01 Markit US Manufacturing PMI 06:45 Sep F 51.00 51.10 51.00 -  
                   
  10/01 ISM Manufacturing 07:00 Sep 50.00 47.80 49.10 -  
                   
  10/01 ISM Prices Paid 06:45 Sep 50.50 49.70 46.00 -  
                   
  10/01 Construction Spending MoM 06:00 Aug 0.50% 0.10% 0.10% -  
                   
  10/02 MBA Mortgage Applications 04:00 27 Sep - 8.10% -10.10% -  
                   
  10/02 ADP Employment Change 05:15 Sep 140k 135k 195k 157k  
                   
  10/03 Challenger Job Cuts YoY 04:30 Sep - -24.80% 39.00% -  
                   
  10/03 Initial Jobless Claims 05:30 28 Sep 215k 219k 213k 215k  
                   
  10/03 Continuing Claims 05:30 21 Sep 1654k 1651k 1650k 1656k  
                   
  10/03 Bloomberg Consumer Comfort 06:45 29 Sep - 62.00 61.70 -  
                   
  10/03 Markit US Services PMI 06:45 Sep F 50.90 50.90 50.90 -  
                   
  10/03 Markit US Composite PMI 06:45 Sep F - 51.00 51.00 -  
                   
  10/03 Factory Orders 07:00 Aug -0.20% -0.10% 1.40% -  
                   
  10/03 Durable Goods Orders 07:00 Aug F - 0.20% 0.20% -  
                   
  10/03 Durables Ex Transportation 07:00 Aug F - 0.50% 0.50% -  
                   
  10/04 Change in Nonfarm Payrolls 05:30 Sep 147k - 130k -  
                   
  10/04 Unemployment Rate 05:30 Sep 3.70% - 3.70% -  
                   
  10/04 Average Hourly Earnings MoM 05:30 Sep 0.30% - 0.40% -  
                   
  10/04 Average Hourly Earnings YoY 05:30 Sep 3.20% - 3.20% -  
                   
  10/04 Labor Force Participation Rate 05:30 Sep 63.20% - 63.20% -
                   
 
 
 
 
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