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Market Commentary


 
Today's Coupons
 
  10-Year Notes   97-30 (+21)  
 
  FN 3.5% Coupon   97-19 (+11.5)  
 
  Support   3.233%  
 
  Resistance   2.948%  
 
 
 
 
Tuesday, October 23, 2018
 
 
Treasuries are modestly higher across the curve this morning from yesterday’s close. The UST 10-Year yield is currently at 3.118% after closing at 3.199% prior.

Treasuries rallied overnight and into the open as risk-off mode sparked a demand in haven amid sell-off in global stocks. Disappointing U.S. earnings results from Tuesday drove the global stock markets lower as investors feared that corporate profits have peaked due to rising interest rates and the trade war. Caterpillar Inc. signaled concerns over rising material costs primarily caused by the increases in steel prices and tariffs. Elsewhere, looming tensions surrounding Italy’s budget crisis also aided the rally in treasuries on news that the EU requested the Italian government to resubmit its budget plan. Various geopolitical anxieties continue to weigh on investor confidence as global financial markets struggle to spark a rally, including the ongoing Brexit negotiations and escalating U.S.-China trade war.

On the economic calendar, we only received the October Richmond Fed Manufacturing Index which came in lower than expected at 15.00 versus 24.00 per consensus after reaching its highest level on record at 29.00 in September. Still ahead, the three-part U.S. government note auctions kick off today at 10:00 AM (PT) with the U.S. selling $38 Billion 2-Year Notes. There are also several Fed Officials on deck today, although they are unlikely to make remarks that will shift the focus from the markets’ current concerns. Speaking today are Minneapolis Fed President Kashkari, Atlanta Fed President Bostic, Dallas Fed President Kaplan, and Kansas City Fed President George.

The curve has bull-flattened with the UST 10-Year yield down 8.1 bps from prior closing.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  10/22 Chicago Fed Nat Activity Index 05:30 Sep 0.21 0.17 0.18 0.27  
                   
  10/23 Richmond Fed Manufact. Index 07:00 Oct 24.00 15.00 29.00 -  
                   
  10/24 MBA Mortgage Applications 04:00 19 Oct - - -7.10% -  
                   
  10/24 FHFA House Price Index MoM 06:00 Aug 0.30% - 0.20% -  
                   
  10/24 Markit US Manufacturing PMI 06:45 Oct P 55.30 - 55.60 -  
                   
  10/24 Markit US Services PMI 06:45 Oct P 54.00 - 53.50 -  
                   
  10/24 Markit US Composite PMI 06:45 Oct P - - 53.90 -  
                   
  10/24 New Home Sales 07:00 Sep 625k - 629k -  
                   
  10/24 New Home Sales MoM 07:00 Sep -0.60% - 3.50% -  
                   
  10/24 U.S. Federal Reserve Releases Beige Book 11:00 - - - - -  
                   
  10/25 Wholesale Inventories MoM 05:30 Sep P 0.50% - 1.00% -  
                   
  10/25 Durable Goods Orders 05:30 Sep P -1.50% - 4.40% -  
                   
  10/25 Durables Ex Transportation 05:30 Sep P 0.40% - 0.00% -  
                   
  10/25 Initial Jobless Claims 05:30 20 Oct 214k - 210k -  
                   
  10/25 Continuing Claims 05:30 13 Oct 1647k - 1640k -  
                   
  10/25 Bloomberg Consumer Comfort 06:45 21 Oct - - 60.80 -  
                   
  10/25 Pending Home Sales MoM 07:00 Sep 0.00% - -1.80% -  
                   
  10/25 Pending Home Sales NSA YoY 07:00 Sep -1.90% - -2.50% -  
                   
  10/25 Kansas City Fed Manf. Activity 08:00 Oct 14.00 - 13.00 -  
                   
  10/26 GDP Annualized QoQ 05:30 3Q A 3.40% - 4.20% -  
                   
  10/26 Personal Consumption 05:30 3Q A 3.30% - 3.80% -  
                   
  10/26 GDP Price Index 05:30 3Q A 2.10% - 3.00% -  
                   
  10/26 Core PCE QoQ 05:30 3Q A 1.70% - 2.10% -  
                   
  10/26 U. of Mich. Sentiment 07:00 Oct F 99.00 - 99.00 -  
                   
 
 
 
 
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