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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   103-11 (-02)  
  FN 3.5% Coupon   99-26 (-02)  
  Support   3.237%  
  Resistance   2.543%  
Thursday, January 17, 2019
Market opened today’s session with treasuries slightly edging lower. 10-Year treasury yield is at 2.7325, 1.07 bps increased from prior closing of 2.7218.

The US federal authorities are investigating Chinese technology giant, Huawei Technologies, for allegedly stealing trade secrets from US partner companies which added more stress to already lingering tensions between the two countries. US equity futures sold-off on the news as well as from disappointing earnings reports from Societe Generale and Morgan Stanley. Both treasuries and WTI crude inched lower this morning. In Washington, with the dispute between the two sides still in a stalemate, many federal employees citied financial hardship as a reason for not reporting to work. Lastly, on the Brexit front, UK Prime Minister May survived a vote of no confidence, following her historic defeat in her Brexit deal.

Leaning against number of recent data indicating an economic slowdown, Philadelphia Fed Business Outlook surprisingly surged to 17.00 in January from a downwardly revised of 9.10 in December vs. survey of 9.50. Despite of the ongoing government shutdown, Initial Jobless Claims fell to 213k from 216k prior vs. consensus of 220k. On the contrary, Continuing Claims climbed to 1737k from revised prior of 1719k vs. consensus of 1734k. Lastly, Bloomberg Consumer Comfort fell to the lowest since November 2016 to 58.10 from 58.50 prior. Housing Starts and Building Permits data are postponed by the shutdown. The US Treasury is scheduled to auction off $13 Billion of 10-Year TIPS at 10:00 AM (PT) today.

The curve has bear-flattened with UST 10-Year yield up 1.07 bps.
This Week's Events
  01/14 No Data - - - - - -  
  01/15 Empire Manufacturing 05:30 Jan 10.00 3.90 10.90 11.50  
  01/15 PPI Final Demand MoM 05:30 Dec -0.10% -0.20% 0.10% -  
  01/15 PPI Final Demand YoY 05:30 Dec 2.50% 2.50% 2.50% -  
  01/16 MBA Mortgage Applications 04:00 11 Jan - 13.50% 23.50% -
  01/16 Import Price Index MoM 05:30 Dec -1.30% -1.00% -1.60% -1.90%
  01/16 Import Price Index YoY 05:30 Dec -0.80% -0.60% 0.70% 0.50%
  01/16 Export Price Index MoM 05:30 Dec -0.70% -0.60% -0.90% -0.80%
  01/16 Export Price Index YoY 05:30 Dec - 1.10% 1.80% -
  01/17 Initial Jobless Claims 05:30 12 Jan 220k 213k 216k -  
  01/17 Continuing Claims 05:30 5 Jan 1734K 1737k 1722k 1719k  
  01/17 Philadelphia Fed Business Outlook 05:30 Jan 9.50 17.00 9.40 9.10  
  01/17 Bloomberg Consumer Comfort 06:45 13 Jan - 58.10 58.50 -  
  01/18 Capacity Utilization 06:15 Dec 78.50% - 78.50% -  
  01/18 U. of Mich. Sentiment 07:00 Jan P 96.90 - 98.30 -  
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