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Market Commentary


 
Today's Coupons
 
  10-Year Notes   97-09.5 (+02.5)  
 
  FN 3.5% Coupon   97-08.5 (+01)  
 
  Support   3.233%  
 
  Resistance   2.873%  
 
 
 
 
Thursday, October 18, 2018
 
 
Treasuries are marginally higher across the curve this morning from yesterday's close. The UST 10-Year yield is currently at 3.200% after closing at 3.206% prior.

Treasuries edged lower overnight as investors continued to digest the tone of the Fed's latest FOMC Minutes that was released mid-session yesterday. The minutes reaffirmed that Fed Officials are in favor of further gradual rate increases and appeared to support an eventual move in rates beyond the neutral level for the economy. Treasuries fell lower towards the end of yesterday's session as the tone showed consistency with the Fed's intent for a fourth rate hike at the end of the year. The Fed remains in focus today with two Fed Officials scheduled to speak including St. Louis Fed President Bullard who will discuss the U.S. economic outlook in Memphis, and Fed Vice Chairman Quarles who will also speak on the economic outlook in New York. Later today at 10:00 AM (PT), U.S. will sell 30-Year TIPS Reopening.

On the economic calendar, we received the October Philadelphia Fed Business Outlook which dropped less than expected from 22.90 prior to 22.20; market consensus expected the index to drop to 20.00. Also received, the Bloomberg Economic Expectations Index rose to a 16-year high of 58.50 in October from 57.05 prior. Moreover, Initial Jobless Claims for the week ended October 13 fell 5k to 210k from a slightly revised 215k the week prior as the claims continue its impressive showing of a tightening labor market. Continuing Claims for the week ended October 6 fell 13k to 1640k from a downwardly revised 1653k the week prior; consensus called for continuing claims to rise to 1663k for the week. Lastly, we received the September Leading Index which rose 0.50% as expected following a 0.40% increase prior.

The curve has bull-flattened with the UST 10-Year yield down 0.6 bp from prior closing.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  10/15 Retail Sales Advance MoM 05:30 Sep 0.60% 0.10% 0.10% -  
                   
  10/15 Empire Manufacturing 05:30 Oct 20.00 21.10 19.00 -  
                   
  10/15 Business Inventories 07:00 Aug 0.50% 0.50% 0.60% 0.70%  
                   
  10/16 Industrial Production MoM 06:15 Sep 0.20% 0.30% 0.40% -  
                   
  10/16 Capacity Utilization 06:15 Sep 78.20% 78.10% 78.10% -  
                   
  10/16 NAHB Housing Market Index 07:00 Oct 66.00 68.00 67.00 -  
                   
  10/16 JOLTS Job Openings 07:00 Aug 6900 7136 6939 7077  
                   
  10/16 Total Net TIC Flows 13:00 Aug $60.30b $108.20b $52.20b $42.70b  
                   
  10/16 Net Long-term TIC Flows 13:00 Aug - $131.80b $74.80b $66.70b  
                   
  10/17 MBA Mortgage Applications 04:00 12 Oct - -7.10% -1.70% -  
                   
  10/17 Housing Starts 05:30 Sep 1210k 1201k 1282k 1268k  
                   
  10/17 Housing Starts MoM 05:30 Sep -5.60% -5.30% 9.20% 7.10%  
                   
  10/17 Building Permits 05:30 Sep 1275k 1241k 1229k 1249k  
                   
  10/17 Building Permits MoM 05:30 Sep 2.00% -0.60% -5.70% -4.10%  
                   
  10/17 FOMC Meeting Minutes 11:00 26 Sep - - - -  
                   
  10/18 Philadelphia Fed Business Outlook 05:30 Oct 20.00 22.20 22.90 -  
                   
  10/18 Initial Jobless Claims 05:30 13 Oct 211k 210k 214k 215k  
                   
  10/18 Continuing Claims 05:30 6 Oct 1663k 1640k 1660k 1653k  
                   
  10/18 Bloomberg Consumer Comfort 06:45 14 Oct - 60.80 59.50 -  
                   
  10/18 Leading Index 07:00 Sep 0.50% 0.50% 0.40% -  
                   
  10/19 Existing Home Sales 07:00 Sep 5.29m - 5.34m -  
                   
  10/19 Existing Home Sales MoM 07:00 Sep -0.90% - 0.00% -  
                   
 
 
 
 
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