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Market Commentary



 
Today's Coupons
 
  10-Year Notes   98-26.5 (+02.5)  
 
  FN 3.5% Coupon   102-24.5 (+02.5)  
 
  Support   2.857%  
 
  Resistance   1.697%  
 
 
 
 
  Tuesday, December 17, 2019
 
 

Treasury Yields Drift as Investor Sentiment Fades

 
 
Market opened today’s session with treasuries drifting across all maturities. 10-Year Treasury yield is at 1.8749, 0.36 bp increased from prior closing of 1.8713.

US stocks struggled a bit this morning after four straight days of gains underpinned by the trade accord as the global rally in equities eased. In corporate news, Boeing’s shares fell in premarket after their decision to halt production of the problematic 737 Max in January, putting more pressure on the company’s finances than ever with its operating cash flow in the third quarter below the weakest performance during the financial crisis in 2008. Treasuries drifted and the dollar advanced against most of its biggest peers. Equities in the UK were particularly choppy after Prime Minister Johnson proposed a legislation to guarantee no extension to the Brexit transition phase which revived the chances of a no-deal Brexit. Elsewhere, WTI crude edged even higher, trading above $60.5 a barrel this morning.

Both Housing Starts and Building Permits in November climbed to 1365k and 1482k from revised prior of 1323k and prior of 1461k, respectively, in response to recent pickup in demand. However, whether this trend will last or not is still in question with tight labor market which can constrain completions of new constructions and the recent rise in mortgage rates. Industrial Production in November jumped to 1.10% from revised prior of -0.90% vs. 0.90% consensus, and Capacity Utilization came in slightly below consensus of 77.40% at 77.30%, a 0.70% increase from revised prior of 76.60%. Lastly, JOLTS Job Openings in October surged to 7267 from upwardly revised prior of 7032 vs. 7009 consensus.

The curve has bear steepened with UST 10-Year yield up 0.36 bp.
 
 
   
 
   
 
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 1345k 1365k 1314k 1323k  
                   
  12/17 Housing Starts MoM 05:30 Nov 2.40% 3.20% 3.80% 4.50%  
                   
  12/17 Building Permits 05:30 Nov 1410k 1482k 1461k -  
                   
  12/17 Building Permits MoM 05:30 Nov -3.50% 1.40% 5.00% -  
                   
  12/17 Capacity Utilization 06:15 Nov 77.40% 77.30% 76.70% 76.60%  
                   
  12/17 JOLTS Job Openings 07:00 Oct 7009 7267 7024 7032  
                   
  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 1676k - 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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