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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-26 (-01)  
  FN 3.5% Coupon   101-06 (-02)  
  Support   3.237%  
  Resistance   2.356%  
Monday, May 20, 2019
Treasury Yields Hold Steady as Tech Sector Struggles
Market opened today’s session with treasuries nearly unchanged across all maturities. 10-Year treasury yield is at 2.3927, 0.18 bp increased from prior closing of 2.3909.

Complying with President Trump’s crackdown on Chinese largest tech company; Huawei, top US corporations such as Intel, Qualcomm, and Google will reportedly no longer supply their products to the Chinese phone-maker. US equity futures slumped as the move battered tech shares globally, and Treasuries erased loss from the overnight session this morning. This fallout could potentially push China to develop an independent infrastructure, kicking off a tech cold war. With the trade talks between the US and China stalled, President Trump said in an interview that he was “very happy” with the trade war and China wouldn’t become the world’s top superpower under his watch. The biggest market focus this week will be on a slew of US economic data along with FOMC minutes on Wednesday. Elsewhere, WTI crude rallied above $63 a barrel this morning as OPEC and its allies indicated their intention to keep the production cut in place until the end of the year.

We only have one economic data released today. Chicago Fed National Activity Index printed -0.45 below estimation of -0.20, following an upwardly revised prior of 0.05. Later today, the US Treasury is scheduled to auction off $36 billion of 3-month bills and $36 billion of 6-month bills at 8:30 AM (PT). Also, a couple of Fed speeches are scheduled for today. Fed Vice Chair Clarida and New York Fed President Williams will take part in a “Fed Listens” event in New York, and Fed Chairman Powell will deliver keynote speech at Atlanta Fed’s annual financial markets conference in Florida.

The curve has bear-flattened with UST 10-Year yield up 0.18 bp.
This Week's Events
  05/20 Chicago Fed Nat Activity Index 05:30 Apr -0.20 -0.45 -0.15 0.05  
  05/21 Existing Home Sales 07:00 Apr 5.35m - 5.21m -  
  05/21 Existing Home Sales MoM 07:00 Apr 2.70% - -4.90% -  
  05/22 MBA Mortgage Applications 04:00 17 May - - -0.60% -  
  05/22 FOMC Meeting Minutes 11:00 1 May - - - -  
  05/23 Initial Jobless Claims 05:30 18 May 215k - 212k -  
  05/23 Continuing Claims 05:30 11 May 1669k - 1660k -  
  05/23 Bloomberg Consumer Comfort 06:45 19 May - - 59.90 -  
  05/23 Markit US Manufacturing PMI 06:45 May P 52.60 - 52.60 -  
  05/23 Markit US Services PMI 06:45 May P 53.50 - 53.00 -  
  05/23 Markit US Composite PMI 06:45 May P - - 53.00 -  
  05/23 New Home Sales 07:00 Apr 671k - 692k -  
  05/23 New Home Sales MoM 07:00 Apr -3.00% - 4.50% -  
  05/23 Kansas City Fed ManfActivity 08:00 May 7.00 - 5.00 -  
  05/24 Durable Goods Orders 05:30 Apr P -2.00% - 2.60% -  
  05/24 Durables Ex Transportation 05:30 Apr P 0.10% - 0.30% -
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