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Market Commentary


 
Today's Coupons
 
  10-Year Notes   97-14 (+0.5)  
 
  FN 3.5% Coupon   97-20 (-02.5)  
 
  Support   3.181%  
 
  Resistance   2.810%  
 
 
 
 
Thursday, October 04, 2018
 
 
Treasuries are lower across the curve this morning from yesterday’s close. The UST 10-Year yield is currently at 3.203% after closing at 3.183% prior.

Treasuries have resumed its downward trend after opening little unchanged from Wednesday’s closing levels at the start of today’s session. Yesterday treasuries sold off as investor appetite for riskier assets sparked risk-on mode that pushed the 10-Year yield to its highest level since 2011 amid growing optimism on the U.S. economy. Upbeat private sector payrolls reflected a continued tightening of the labor market while the non-manufacturing sector showed a record-high reading in September despite disruptions from Hurricane Florence and the U.S.-China trade rhetoric. The sell-off was further supported by comments from Fed Chairman Powell stating that the U.S. economy is enjoying ”extraordinary times“ in reference to a set of recent positive economic data, and signaled that the Federal Reserve will press on with rate hikes. The focus will now be on the September employment reports on Friday, which is expected to have a more captive audience than in recent months.

This morning we received the Initial Jobless Claims for the week ended September 29 which fell 8k to 207k from a slightly revised 215k prior. Continuing Claims for the week ended September 22 fell 13k to 1650k from a revised 1663k prior. Also on the calendar, the August Factory Orders rose 2.30% MoM following a revised 0.50% decline in July; Factory Orders excluding transportation rose 0.10% following a revised 0.10% increase prior. Moreover, the August Durable Goods Orders was revised down to reflect a 4.40% gain from prior estimates of a 4.50% increase, while Durables excluding transportation was revised down to a 0.00% MoM change from prior estimates of a 0.10% gain. Lastly, Capital Goods Orders Nondefense excluding aircrafts was revised down to show a decline of 0.90% in August, while Capital Goods Shipments excluding aircrafts was revised down to reflect a 0.20% drop in August.

The curve has bear-steepened with the UST 10-Year yield up 2.0 bps from prior closing.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  10/01 Markit US Manufacturing PMI 06:45 Sep F 55.60 55.60 55.60 -  
                   
  10/01 Construction Spending MoM 07:00 Aug 0.40% 0.10% 0.10% 0.20%  
                   
  10/01 ISM Manufacturing 07:00 Sep 60.00 59.80 61.30 -  
                   
  10/01 ISM Prices Paid 07:00 Sep 71.40 66.90 72.10 -  
                   
  10/02 No Data - - - - - -  
                   
  10/03 MBA Mortgage Applications 04:00 28 Sep - 0.03% 2.90% -  
                   
  10/03 ADP Employment Change 05:15 Sep 184k 230k 163k 168k  
                   
  10/03 Markit US Services PMI 06:45 Sep F 53.00 53.50 52.90 -  
                   
  10/03 Markit US Composite PMI 06:45 Sep F - 53.90 53.40 -  
                   
  10/04 Challenger Job Cuts YoY 04:30 Sep - 70.90% 13.70% -  
                   
  10/04 Initial Jobless Claims 05:30 29 Sep 215k 207k 214k 215k  
                   
  10/04 Continuing Claims 05:30 22 Sep 1665k 1650k 1661k 1663k  
                   
  10/04 Bloomberg Consumer Comfort 06:45 30 Sep - 61.60 61.20 -  
                   
  10/04 Factory Orders 07:00 Aug 2.10% 2.30% -0.80% -0.50%  
                   
  10/04 Durable Goods Orders 07:00 Aug F 4.50% 4.40% 4.50% -  
                   
  10/04 Durables Ex Transportation 07:00 Aug F - 0.00% 0.10% -  
                   
  10/05 Trade Balance 05:30 Aug -$53.50b - -$50.10b -  
                   
  10/05 Change in Nonfarm Payrolls 05:30 Sep 184k - 201k -  
                   
  10/05 Unemployment Rate 05:30 Sep 3.80% - 3.90% -  
                   
  10/05 Average Hourly Earnings MoM 05:30 Sep 0.30% - 0.40% -  
                   
  10/05 Average Hourly Earnings YoY 05:30 Sep 2.80% - 2.90% -  
                   
  10/05 Labor Force Participation Rate 05:30 Sep 62.70% - 62.70% -  
                   
 
 
 
 
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