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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   103-21 (+08)  
  FN 3.5% Coupon   100-04 (+04.5)  
  Support   3.237%  
  Resistance   2.543%  
Tuesday, February 05, 2019
Treasuries are moderately higher across the curve this morning from yesterday’s close. The UST 10-year yield is currently at 2.697% after closing at 2.724% prior.

Treasuries advanced at the start of today’s session, while U.S. stocks pushed higher for a fifth straight day with market sentiment earning a boost from corporate results and decent economic data. Markets are relatively calm despite the looming unresolved trade negotiations between U.S. and China. President Trump will deliver his second State of the Union address later today, and investors will be watching closely for clues on the outlook of foreign trade. Elsewhere, West Texas oil inched lower as traders weighed output cuts from the OPEC production members against expectations for rising U.S. crude inventories. Earnings season continues with reports this week from Twitter, Disney, Philip Morris and MetlLife.

Today’s economic calendar kicked off with the final reading of the January Markit US Services PMI, which remained unchanged and matched estimates at 54.20. Markit US Composite PMI slightly lowered to 54.40 from 54.50 prior. We also received the January ISM Non-Manufacturing Index which came in slightly lower than expected at 56.70 versus 57.10 per consensus; its prior reading was slightly revised to 58.00 from 57.60. Later today at 10:00 AM (PT), U.S. will sell $38 Billion 3-Year Notes in the first of three Notes auctions scheduled this week. On Wednesday, Fed Chairman Powell will give his first public comments following the January FOMC meeting and rate decision.

The curve has bull-flattened with the UST 10-year yield down 2.7 bps from prior closing.
This Week's Events
  02/04 Factory Orders 07:00 Nov 0.30% -0.60% -2.10% -  
  02/04 Durable Goods Orders 07:00 Nov F 1.50% 0.70% 0.80% -  
  02/04 Durables Ex Transportation 07:00 Nov F 0.00% -0.40% -0.30% -  
  02/05 Markit US Services PMI 06:45 Jan F 54.20 54.20 54.20 -  
  02/05 Markit US Composite PMI 06:45 Jan F - 54.40 54.50 -  
  02/06 MBA Mortgage Applications 04:00 1 Feb - - -3.00% -
  02/07 Initial Jobless Claims 05:30 2 Feb 220k - 253k -  
  02/07 Continuing Claims 05:30 26 Jan 1733k - 1782k -  
  02/07 Bloomberg Consumer Comfort 06:45 3 Feb - - 57.40 -  
  02/08 No Data - - - - - -  
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