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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   101-11+ (+09)  
  FN 3.5% Coupon   101-04 (+02)  
  Support   3.237%  
  Resistance   2.457%  
Tuesday, May 07, 2019
Treasury Yields Remain Steady as Trade Talk Continues
Market opened today’s session with treasuries nearly unchanged across all maturities. 10-Year treasury yield is at 2.4656, 0.36 bp decreased from prior closing of 2.4692.

Stocks edged lower for a second day after President Trump’s threat to impose higher tariffs on Chinese imports. The dollar gained and Treasuries steadied this morning as Beijing confirmed that they would still send negotiators to Washington this week, led by Chinese Vice Premier Liu He. However, investor sentiment still remains fragile even after the confirmation that the talks are still moving forward to find a compromise. On Brexit front, talks between Prime Minister May and the main opposition Labour Party are scheduled for today as the leaders seek an agreement that would break that deadlock. Elsewhere, Oil dropped as Saudi Arabia would reportedly provide extra crude supplies to its customers in Asia, lifting some of the global oil supply concerns.

We have a very light calendar today. JOLTS Job Openings increased to 7488k in March vs. 7350k consensus, following a revised reading of 7142k in February. Later today, Consumer Credit data for March will be released at 12:00 PM (PT), and the US Treasury is scheduled to auction off $38 billion of 3-year notes at 10:00 AM (PT). Also, Fed Vice Chairman Quarles will discuss financial regulation at an event at Yale University.

The curve has bull-steepened with UST 10-Year yield down 0.36 bp.
This Week's Events
  05/06 No Data - - - - - -  
  05/07 JOLTS Job Openings 07:00 Mar 7350 7488 7087 7142  
  05/08 MBA Mortgage Applications 04:00 3 May - - -4.30% -  
  05/09 PPI Final Demand MoM 05:30 Apr 0.30% - 0.60% -  
  05/09 PPI Final Demand YoY 05:30 Apr 2.30% - 2.20% -  
  05/09 Trade Balance 05:30 Mar -$50.20b - -$49.40b -  
  05/09 Initial Jobless Claims 05:30 4 May 220k - 230k -  
  05/09 Continuing Claims 05:30 27 Apr 1670k - 1671k -  
  05/09 Bloomberg Consumer Comfort 06:45 5 May - - 60.40 -  
  05/09 Wholesale Inventories MoM 07:00 Mar F 0.00% - 0.00% -  
  05/09 Wholesale Trade Sales MoM 07:00 Mar 0.60% - 0.30% -  
  05/10 CPI MoM 05:30 Apr 0.40% - 0.40% -  
  05/10 CPI YoY 05:30 Apr 2.10% - 1.90% -  
  05/10 Monthly Budget Statement 11:00 Apr $165.00b - $214.30b -
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