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Market Commentary


 
Today's Coupons
 
  10-Year Notes   98-30 (-25)  
 
  FN 3.5% Coupon   102-10 (-06.5)  
 
  Support   3.237%  
 
  Resistance   1.442%  
 
 
 
 
Friday, October 11, 2019
 
 
Stocks Rally, Treasuries Slip on Trade Optimism
 
 
Market opened today’s session with treasuries weaker across all maturities. The 10-Year treasury yield is currently at 1.728 after closing at 1.670 prior.

Stocks surged overnight amid growing optimism that the trade negotiations between U.S. and China are progressing as the high-level talks move into a second day. President Trump stated that the negotiations are going “really well” at the end of yesterday’s meeting, and will meet with China’s lead negotiator Vice Premier Liu He later today. Treasuries weakened on the positive trade outlook as momentum strengthens towards a partial deal for a temporary truce on tariffs. Elsewhere, reports of a potential breakthrough on a Brexit deal also signaled optimism for investors as the European Union’s chief negotiator Michel Barnier recommended that detailed talks with the U.K. can begin in earnest. The pound saw its biggest two-day gain in a decade in hopes of a possible Brexit deal ahead of the October 31st deadline. In commodity space, West Texas Intermediate crude gained 1.10%, while gold declined 0.60%.

On the economic calendar, we received the Import Price Index for the month of September, which rose 0.20% following a revised 0.20% decline prior. Import Price Index is down 1.60% YoY from a revised drop of 1.80% prior. Moreover, the September Export Price Index fell 0.20% MoM, while its YoY level declined 1.60% following a 1.40% drop prior. Excluding petroleum, the Import Price Index fell 0.10% MoM as expected. Lastly, we received the preliminary reading of the University of Michigan Sentiment for October, which came in above expectations at 96.00 versus 92.00 per consensus. In Fedspeak, Boston Fed Bank President Rosengren and Dallas Bank President Kaplan are both scheduled to speak later today.

The curve has bear-steepened with the UST 10-Year yield up 5.8 bps from prior closing.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  10/07 Monthly Budget Statement 11:00 Sep $96.50b - $119.10b -  
                   
  10/07 Consumer Credit 12:00 Aug $15.000b $17.901b $23.294b $23.046b  
                   
  10/08 NFIB Small Business Optimism 03:00 Sep 102.00 101.80 103.10 -  
                   
  10/08 PPI Final Demand MoM 05:30 Sep 0.10% -0.30% 0.10% -  
                   
  10/08 PPI Final Demand YoY 05:30 Sep 1.80% 1.40% 1.80% -  
                   
  10/09 MBA Mortgage Applications 04:00 4 Oct - 5.20% 8.10% -  
                   
  10/09 JOLTS Job Openings 07:00 Aug 7250 7051 7217 7174  
                   
  10/09 Wholesale Trade Sales MoM 07:00 Aug - 0.00% 0.30% 0.20%  
                   
  10/09 Wholesale Inventories MoM 07:00 Aug F 0.40% 0.20% 0.40% -  
                   
  10/09 FOMC Meeting Minutes 11:00 18 Sep - - - -  
                   
  10/10 CPI MoM 05:30 Sep 0.10% 0.00% 0.10% -  
                   
  10/10 CPI YoY 05:30 Sep 1.80% 1.70% 1.70%    
                   
  10/10 Initial Jobless Claims 05:30 5 Oct 220k 210k 219k 220k  
                   
  10/10 Continuing Claims 05:30 28 Oct 1651k 1684k 1651k 1655k  
                   
  10/10 Bloomberg Consumer Comfort 06:45 6 Oct - - 62.00 -  
                   
  10/11 Import Price Index MoM 05:30 Sep 0.00% 0.20% -0.50% -0.20%  
                   
  10/11 Import Price Index YoY 05:30 Sep -2.10% -1.60% -2.00% -1.80%  
                   
  10/11 Export Price Index MoM 05:30 Sep -0.10% -0.20% -0.60% -  
                   
  10/11 Export Price Index YoY 05:30 Sep - -1.60% -1.40% -  
                   
  10/11 U. of Mich. Sentiment 07:00 Oct P 92.00 96.00 93.20 -
                   
 
 
 
 
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