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Market Commentary



 
Today's Coupons
 
  10-Year Notes   98-14.5 (-04)  
 
  FN 3.5% Coupon   102-22 (-00.5)  
 
  Support   2.808%  
 
  Resistance   1.697%  
 
 
 
 
  Friday, December 20, 2019
 
 

Treasury Yields Remain Unchanged with Stocks Solidifying another Weekly Gain

 
 
Market opened today’s session with treasuries nearly unchanged across all maturities. 10-Year Treasury yield is at 1.9206, 0.02 bp increased from prior closing of 1.9204.

US equity futures pointed to a higher open this morning with the S&P 500 heading for its fourth straight weekly gain. Investors shrugged off the impeachment news and sentiment got a boost after Treasury Secretary Mnuchin confirmed that the signing of a phase-one trade deal between the US and China would take place in January though detailed terms still remained unclear. The day after voting to impeach President Trump, the House passed the bill to replace the current NAFTA which will most likely be taken up to the Senate in January after finishing the impeachment trial. Also, the Senate passed spending bills yesterday to avoid a partial government shutdown. With solid performance in equity market, Treasuries continued to sell-off and the yield curve has gradually steepened in recent days, nearing its steepest in more than a year; an indication that recession worries from earlier this year have receded. Elsewhere, WTI crude dipped below $61 a barrel this morning.

GDP in the third quarter remained unchanged at 2.10% from prior reading. However, Personal Consumption climbed to 3.20% from 2.90% prior vs. 2.90% consensus. Personal Income in November increased to 0.50% from upwardly revised prior of 0.10% vs. 0.30% consensus, and Personal Spending came in line with consensus of 0.40%. Lastly, University of Michigan Sentiment slightly edged higher to 99.30 from 99.20 prior vs. 99.20 consensus.

The curve has bear steepened with UST 10-Year yield up 0.02 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 - $32.50b $49.50b -  
                   
  12/16 Total Net TIC Flows 13:00 Oct - -$48.30b -$37.60b -$38.10b  
                   
  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 - -5.00% 3.80% -  
                   
  12/19 Philadelphia Fed Business Outlook 05:30 Dec 8.00 0.30 10.40 -  
                   
  12/19 Initial Jobless Claims 05:30 14 Dec 225k 234k 252k -  
                   
  12/19 Continuing Claims 05:30 7 Dec 1676k 1722k 1667k 1671k  
                   
  12/19 Bloomberg Consumer Comfort 06:45 15 Dec - 61.10 62.10 -  
                   
  12/19 Leading Index 07:00 Nov 0.10% 0.00% -0.10% -0.20%  
                   
  12/19 Existing Home Sales 07:00 Nov 5.44m 5.35m 5.46m 5.44m  
                   
  12/19 Existing Home Sales MoM 07:00 Nov -0.40% -1.70% 1.90% 1.50%  
                   
  12/20 Personal Consumption 05:30 3Q T 2.90% 3.20% 2.90% -  
                   
  12/20 GDP Price Index 05:30 3Q T 1.80% 1.80% 1.80% -  
                   
  12/20 Personal Income 07:00 Nov 0.30% 0.50% 0.00% 0.10%  
                   
  12/20 Personal Spending 07:00 Nov 0.40% 0.40% 0.30% -  
                   
  12/20 PCE Deflator MoM 07:00 Nov 0.20% 0.20% 0.20% -  
                   
  12/20 PCE Deflator YoY 07:00 Nov 1.40% 1.50% 1.30% 1.40%  
                   
  12/20 U. of Mich. Sentiment 07:00 Dec F 99.20 99.30 99.20 -  
                   
  12/20 Kansas City Fed Manf. Activity 08:00 Dec -3.00 - -3.00 -
                   
 
 
 
 
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