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Market Commentary


 
Today's Coupons
 
  10-Year Notes   99-11.5 (+28.5)  
 
  FN 3.5% Coupon   102-20 (+06)  
 
  Support   3.237%  
 
  Resistance   1.529%  
 
 
 
 
Thursday, October 31, 2019
 
 
Treasury Yields Decline Due to Ongoing Trade Negotiations
 
 
Market opened today’s session with treasuries rallying across all maturities. The 10-Year Treasury yield is currently at 1.7032, 6.83 bps decreased from prior closing of 1.7715.

The Dow Jones dropped 114 points; the S&P 500 decreased 0.30% - falling from a record high, along with the Nasdaq Composite. As contracts are drawn for the partial trade deal that has been negotiated between the US and China, China states that they will not budge on the bigger trade issues. The US and China have a scheduled telephone call tomorrow to continue negotiating before the partial trade deal is signed. Yesterday Federal Reserve Chairman Jerome Powell announced another rate cut, and advised that the central bank would not consider raising them until inflation “picks up”. Gold rose 0.80% to $1,507.23 an ounce, while West Texas Intermediate crude oil slipped 1.10% to $54.44 a barrel. The yield on 10-Year Treasuries declined four basis points to 1.73%. The yield on 2-Year Treasuries decreased two basis points to 1.58%. Germany’s 10-Year yield decreased five basis points to -0.40%. Britain’s 10-Year yield fell five basis points to 0.638%. Japan’s 10-Year yield decreased two basis points to -0.133%. The US Treasury will offer $55 billion and $40 billion in four-week bills and eight-week bills at its weekly auction, respectively.

The US Department of Labor released a report stating jobless claims rose by 5,000 to 218,000 for the week of October 26th. The insured jobless rate was reported at 1.20% the week prior. State claims showed increased claims in 13 states and territories, while 40 states and territories showed lower filings for unemployment benefits. Oregon and Ohio were reported the highest number of claims at 418 and 358, respectively. New York and Texas reported the largest decrease with filings down 2,931 and 1,284, respectively. The Department of Commerce reported consumer spending on goods and services increased by 0.20%, from the previous month. The personal savings rate rose to 8.30% in September, reaching its highest level since March. These updates followed Wednesday’s release of the third-quarter GDP, which showed an increase of 1.90% fueled by consumer spending.

The curve has bull-flattened with the UST 10-Year yield down 6.83 bps from prior closing.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  10/28 Chicago Fed Nat Activity Index 05:30 Sep 0.00 -0.45 0.10 0.15  
                   
  10/28 Wholesale Inventories MoM 05:30 Sep P 0.20% -0.30% 0.20% 0.00%  
                   
  10/28 Dallas Fed ManfActivity 07:30 Oct 1.00 - 1.50 -  
                   
  10/29 S&P CoreLogic CS 20-City MoM SA 06:00 Aug -0.10% -0.16% 0.02% 0.04%  
                   
  10/29 S&P CoreLogic CS 20-City YoY NSA 06:00 Aug 2.10% 2.03% 2.00% 2.03%  
                   
  10/29 Pending Home Sales MoM 07:00 Sep 0.90% 1.50% 1.60% 1.40%  
                   
  10/29 Pending Home Sales NSA YoY 07:00 Sep 3.60% 6.30% 1.10% 1.00%  
                   
  10/30 MBA Mortgage Applications 04:00 25 Oct - 0.60% -11.90% -  
                   
  10/30 ADP Employment Change 05:15 Oct 110k 125k 135k 93k  
                   
  10/30 GDP Annualized QoQ 05:30 3Q A 1.60% 1.90% 2.00% -  
                   
  10/30 Personal Consumption 05:30 3Q A 2.60% 2.90% 4.60% -  
                   
  10/30 GDP Price Index 05:30 3Q A 1.90% 1.70% 2.40% -  
                   
  10/30 Core PCE QoQ 05:30 3Q A 2.20% 2.20% 1.90% -  
                   
  10/30 FOMC Rate Decision (Upper Bound) 11:00 30 Oct 1.75% 1.75% 2.00% -  
                   
  10/30 FOMC Rate Decision (Lower Bound) 11:00 30 Oct 1.50% 1.50% 1.75% -  
                   
  10/31 Challenger Job Cuts YoY 04:30 Oct - -33.50% -24.80% -  
                   
  10/31 Personal Income 05:30 Sep 0.30% 0.30% 0.40% 0.50%  
                   
  10/31 Personal Spending 05:30 Sep 0.30% 0.20% 0.10% 0.20%  
                   
  10/31 PCE Deflator MoM 05:30 Sep 0.00% 0.00% 0.00% -  
                   
  10/31 PCE Deflator YoY 05:30 Sep 1.40% 1.30% 1.40% -  
                   
  10/31 Initial Jobless Claims 05:30 26 Oct 215k 218k 212k 213k  
                   
  10/31 Continuing Claims 05:30 19 Oct 1679k 1690k 1682k 1683k  
                   
  10/31 Bloomberg Consumer Comfort 06:45 27 Oct - 61.00 63.40 -  
                   
  11/01 Change in Nonfarm Payrolls 05:30 Oct 85k - 136k -  
                   
  11/01 Unemployment Rate 05:30 Oct 3.60% - 3.50% -  
                   
  11/01 Average Hourly Earnings MoM 05:30 Oct 0.30% - 0.00% -  
                   
  11/01 Average Hourly Earnings YoY 05:30 Oct 3.00% - 2.90% -  
                   
  11/01 Labor Force Participation Rate 05:30 Oct 63.10% - 63.20% -  
                   
  11/01 Markit US Manufacturing PMI 06:45 Oct F 51.50 - 51.50 -  
                   
  11/01 ISM Manufacturing 07:00 Oct 49.00 - 47.80 -  
                   
  11/01 ISM Prices Paid 07:00 Oct 50.00 - 49.70 -  
                   
  11/01 Construction Spending MoM 07:00 Sep 0.20% - 0.10% -
                   
 
 
 
 
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