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Market Commentary



 
Today's Coupons
 
  10-Year Notes   98-25 (-18.5)  
 
  FN 3.5% Coupon   102-22 (-04)  
 
  Support   2.857%  
 
  Resistance   1.697%  
 
 
 
 
  Monday, December 16, 2019
 
 

Treasury Yields Climb as Stocks Continue to Gain on Trade Deal

 
 
Market opened today’s session with treasuries selling-off across all maturities. 10-Year Treasury yield is at 1.8626, 4.00 bps increased from prior closing of 1.8226.

US stock index futures rose this morning despite of a 4% drop in Boeing’s share which came after it was reported that the company was nearing a decision on possibly halting or cutting production of the problematic 737 Max model. Treasuries fell as investors hoped that a partial deal between the US and China would ease the mood for investors heading into year end. There are still some risks lingering as many details need to be ironed out between the two countries, and as how soon both countries will follow through with their promises of a partial deal remain unclear. Also, risks remain high elsewhere as China threatened to retaliate against Germany if they exclude Huawei as a supplier of 5G wireless equipment. In Europe, numbers showed that manufacturing sector weakened even further as the factory data in Germany and France unexpectedly slid below expectations. Elsewhere, WTI crude traded near a three-month high, hovering around $60 a barrel this morning.

Despite of weakness shown in Europe, Manufacturing data in New York printed an upbeat reading of 3.50, a 0.60 increase from prior of 2.90 with expectations for technology spending matching the highest since 2011. Markit US Manufacturing PMI, however, edged lower to 52.50 from 52.60 prior. Services PMI rose to 52.20 from 51.60 prior vs. 52.00 consensus. Lastly, NAHB Housing Market Index in December jumped to 76.00 from revised prior of 71.00 vs. 70.00 consensus. Later today, the US Treasury is scheduled to auction off $42 billion of 13-week bills and $36 billion of 26-week bills at 8:30 AM (PT).

The curve has bear steepened with UST 10-Year yield up 4.00 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  12/16 Empire Manufacturing 05:30 Dec 4.00 3.50 2.90 -  
                   
  12/16 NAHB Housing Market Index 07:00 Dec 70.00 76.00 70.00 71.00  
                   
  12/16 Net Long-term TIC Flows 13:00 Oct - - $49.50b -  
                   
  12/16 Total Net TIC Flows 13:00 Oct - - -$37.60b -  
                   
  12/17 Housing Starts 05:30 Nov 1344k - 1314k -  
                   
  12/17 Housing Starts MoM 05:30 Nov 2.30% - 3.80% -  
                   
  12/17 Building Permits 05:30 Nov 1418k - 1461k -  
                   
  12/17 Building Permits MoM 05:30 Nov -2.90% - 5.00% -  
                   
  12/17 Capacity Utilization 06:15 Nov 77.40% - 76.70% -  
                   
  12/17 JOLTS Job Openings 07:00 Oct 7009 - 7024 -  
                   
  12/18 MBA Mortgage Applications 04:00 13 Dec - - 3.80% -  
                   
  12/19 Philadelphia Fed Business Outlook 05:30 Dec 8.00 - 10.40 -  
                   
  12/19 Initial Jobless Claims 05:30 14 Dec 225k - 252k -  
                   
  12/19 Continuing Claims 05:30 7 Dec 1672k - 1667k -  
                   
  12/19 Bloomberg Consumer Comfort 06:45 15 Dec - - 62.10 -  
                   
  12/19 Leading Index 07:00 Nov 0.10% - -0.10% -  
                   
  12/19 Existing Home Sales 07:00 Nov 5.44m - 5.46m -  
                   
  12/19 Existing Home Sales MoM 07:00 Nov -0.40% - 1.90% -  
                   
  12/20 Personal Consumption 05:30 3Q T 2.90% - 2.90% -  
                   
  12/20 GDP Price Index 05:30 3Q T 1.80% - 1.80% -  
                   
  12/20 Personal Income 07:00 Nov 0.30% - 0.00% -  
                   
  12/20 Personal Spending 07:00 Nov 0.40% - 0.30% -  
                   
  12/20 PCE Deflator MoM 07:00 Nov 0.20% - 0.20% -  
                   
  12/20 PCE Deflator YoY 07:00 Nov 1.40% - 1.30% -  
                   
  12/20 U. of Mich. Sentiment 07:00 Dec F 99.20 - 99.20 -  
                   
  12/20 Kansas City Fed Manf. Activity 08:00 Dec -3.00 - -3.00 -
                   
 
 
 
 
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