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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   102-28.5 (+10)  
  FN 3.5% Coupon   102-0.5 (+05)  
  Support   3.237%  
  Resistance   2.015%  
Tuesday, June 18, 2019
Treasury Yields Decline as FOMC Meeting Kicks Off
Market opened today’s session with treasuries rallying across all maturities. 10-Year Treasury yield is at 2.0509, 4.33 bps decreased from prior closing of 2.0942.

Stocks rallied along with Treasuries as comments from ECB President Draghi added fuel to investors’ hopes for more accommodative monetary policy. Draghi said additional stimulus might be required in the absence of improvement which sent the euro downward against the dollar. President Trump quickly criticized his remarks in a tweet that they are weakening their currency to make the region’s exports more competitive. In Europe, investor confidence data out of Germany supported Draghi’s comments as it worsened drastically in June. Another noteworthy event took place in France where its 10-year yield fell to 0.00% for the first time, poised to join the list of European nations with benchmark debt that have negative rates. In the US, the two-day FOMC meeting kicks off today and their decision will be released at 11:00 AM (PT) tomorrow, followed by a press conference with Fed Chair Powell. Elsewhere, WTI crude climbed this morning as OPEC nations are still unable to agree on a date for their next meeting.

Housing Starts in May came in above consensus of 1239k at 1269k, following an upwardly revised prior of 1281k. Building Permits edged higher at 1294k from a downwardly revised prior of 1290k while consensus called for 1292k. Later today, the US Treasury is scheduled to auction off $26 billion of 52-week bills at 8:30 AM (PT).

The curve has bull-flattened with UST 10-Year yield down 4.33 bps.
This Week's Events
  06/17 Empire Manufacturing 05:30 Jun 11.00 -8.60 17.80 -  
  06/17 NAHB Housing Market Index 07:00 Jun 67.00 64.00 66.00 -  
  06/18 Housing Starts 05:30 May 1239k 1269k 1235k 1281k  
  06/18 Housing Starts MoM 05:30 May 0.30% -0.90% 5.70% 6.80%  
  06/18 Building Permits 05:30 May 1292k 1294k 1296k 1290k  
  06/18 Building Permits MoM 05:30 May 0.10% 0.30% 0.60% 0.20%  
  06/19 MBA Mortgage Applications 04:00 14 Jun - - 26.80% -  
  06/19 FOMC Rate Decision (Upper Bound) 11:00 19 Jun 2.50% - 2.50% -  
  06/19 FOMC Rate Decision (Lower Bound) 11:00 19 Jun 2.25% - 2.25% -  
  06/20 Philadelphia Fed Business Outlook 05:30 Jun 10.70 - 16.60 -  
  06/20 Initial Jobless Claims 05:30 15 Jun 220k - 222k -  
  06/20 Continuing Claims 05:30 8 Jun 1680k - 1695k -  
  06/20 Bloomberg Consumer Comfort 06:45 16 Jun - - 61.60 -  
  06/20 Leading Index 07:00 May 0.10% - 0.20% -  
  06/21 Markit US Manufacturing PMI 06:45 Jun P 50.50 - 50.50 -  
  06/21 Markit US Services PMI 06:45 Jun P 51.00 - 50.90 -  
  06/21 Markit US Composite PMI 06:45 Jun P - - 50.90 -  
  06/21 Existing Home Sales 07:00 May 5.26m - 5.19m -  
  06/21 Existing Home Sales MoM 07:00 May 1.40% - -0.40% -
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