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Market Commentary


Wednesday
October 15, 2014
10-YEAR NOTES   104-10 (+2-24.5)
1.887%
FN 3.5% COUPON   105-09 (+1-21.5)
SUPPORT   2.660%
RESISTANCE   2.200%
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Yesterday the flight to quality deepened in reaction to pessimistic data from Germany and treasuries extended their rally, pushing the 10-Year bond to the lowest yield levels since June of 2013. MBA mortgage application rose +5.6% with Purchase down -0.7% and Refinancing gaining +10.6% for the week ending on October 10. The Producer Price Index advanced +0.1% in July, was unchanged in August, and today we saw a -0.1% decline for September. September’s PPI decline can be traced to the indexes for both goods and services, which moved down -0.2% and -0.1%, respectively. The Empire Manufacturing Index came in much lower than expected, declining to 6.17 from 27.54 level of last month vs. the consensus forecast of 20.25. Retail sales for September also decreased -0.3% from August vs. -0.1% survey. 10-Year notes are testing resistance levels this morning in reaction to the disappointing data, and the curve has bull flattened with 2s10s down -13 bps.

This Week's Events:

DATE EVENTS TIME (PDT) PERIOD SURVEY ACTUAL PRIOR REVISED
10/15 MBA Mortgage Applications 04:00 October 10 - 5.6% 3.8% -
10/15 Empire Manufacturing 05:30 October 20.25 6.17 27.54 -
10/15 Retail Sales Advance MoM 05:30 September -0.1% -0.3% 0.6% -
10/15 PPI Final Demand MoM 05:30 September 0.1% -0.1% 0.0% -
10/15 PPI Final Demand YoY 05:30 September 1.8% 1.6% 1.8% -
10/15 Monthly Budget Statement 11:00 September $90.0 Billion - $75.1 Billion -
10/15 Beige Book 11:00 - - - - -
10/16 Initial Jobless Claims 05:30 October 11 290K - 287K -
10/16 Continuing Claims 05:30 October 4 2380K - 2381K -
10/16 Industrial Production MoM 06:15 September 0.4% - -0.1% -
10/16 Capacity Utilization 06:15 September 79.0% - 78.8% -
10/17 Housing Starts 05:30 September 1005K - 956K -
10/17 Housing Starts MoM 05:30 September 5.1% - -14.4% -
10/17 Building Permits 05:30 September 1030K - 998K 1003K
10/17 Building Permits MoM 05:30 September 2.7% - -5.6% -5.1%

 

 

 
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