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Market Commentary


 
Today's Coupons
 
  10-Year Notes   97-26 (-06.5)  
 
  FN 3.5% Coupon   97-16.5 (-03)  
 
  Support   3.233%  
 
  Resistance   2.966%  
 
 
 
 
Thursday, October 25, 2018
 
 
Treasuries are lower across the curve this morning from yesterday’s close. The UST 10-Year yield is currently at 3.135% after closing at 3.104% prior.

Treasuries fell overnight and opened weaker at the start of today’s session while U.S. stocks advanced after Twitter, Microsoft and Tesla all reported strong earnings results. Corporate earnings season continues later today after the close with results from Intel, Amazon and Alphabet. Elsewhere, the European Central Bank reiterated its intent to cap its bond-buying program by year-end and announced to keep its key rate unchanged; the dollar fell while the euro rose on ECB’s latest decision. Along with lingering geopolitical tensions, the focus remains on the Fed as investors continue to assess how the market uncertainties could affect policy decisions. There are two Fed Officials scheduled to speak today featuring Cleveland Fed President Mester and Fed Vice Chairman Clarida. Later today at 10:00 AM (PT), the U.S. will sell $31 Billion 7-Year Notes to conclude this week’s treasury auction cycle.

Today’s heavy economic calendar kicked off with the Advance Goods Trade Balance for September which showed that the deficit widened to $76.00 Billion from a revised $75.50 Billion deficit prior. Further, we received the September Wholesale Inventories which rose 0.30% following an upwardly revised 0.90% gain prior; Retail Inventories rose 0.10% following a revised 0.60% increase prior. Also received, the September Durable Goods Orders gained 0.80% after a revised increase of 4.60% prior; excluding transportation, durables gained 0.10% for the month after a revised 0.30% rise prior. Moreover, Capital Goods Orders fell 0.10% following a revised 0.20% decline prior, while Capital Goods Shipments was unchanged at 0.00%. Lastly, the September Pending Home Sales report showed a 0.50% increase MoM following a revised 1.90% decline prior; its YoY level came in lower than expected at a 3.40% drop versus a 2.60% drop per market consensus.

The curve has bear-steepened with the UST 10-Year yield up 3.1 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 - 4.90% -7.10% -  
                   
  10/24 FHFA House Price Index MoM 06:00 Aug 0.30% 0.30% 0.20% 0.40%  
                   
  10/24 Markit US Manufacturing PMI 06:45 Oct P 55.30 55.90 55.60 -  
                   
  10/24 Markit US Services PMI 06:45 Oct P 54.00 54.70 53.50 -  
                   
  10/24 Markit US Composite PMI 06:45 Oct P - 54.80 53.90 -  
                   
  10/24 New Home Sales 07:00 Sep 625k 553k 629k 585k  
                   
  10/24 New Home Sales MoM 07:00 Sep -0.60% -5.50% 3.50% -3.00%  
                   
  10/24 U.S. Federal Reserve Releases Beige Book 11:00 - - - - -  
                   
  10/25 Wholesale Inventories MoM 05:30 Sep P 0.50% 0.30% 1.00% 0.90%  
                   
  10/25 Durable Goods Orders 05:30 Sep P -1.50% 0.80% 4.40% 4.60%  
                   
  10/25 Durables Ex Transportation 05:30 Sep P 0.40% 0.10% 0.00% 0.30%  
                   
  10/25 Initial Jobless Claims 05:30 20 Oct 215k 215k 210k -  
                   
  10/25 Continuing Claims 05:30 13 Oct 1644k 1636k 1640k 1641k  
                   
  10/25 Bloomberg Consumer Comfort 06:45 21 Oct - 60.10 60.80 -  
                   
  10/25 Pending Home Sales MoM 07:00 Sep 0.00% 0.50% -1.80% -1.90%  
                   
  10/25 Pending Home Sales NSA YoY 07:00 Sep -2.60% -3.40% -2.50% -2.60%  
                   
  10/25 Kansas City Fed Manf. Activity 08:00 Oct 14.00 - 13.00 -  
                   
  10/26 GDP Annualized QoQ 05:30 3Q A 3.30% - 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 1.80% - 2.10% -  
                   
  10/26 U. of Mich. Sentiment 07:00 Oct F 99.00 - 99.00 -  
                   
 
 
 
 
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