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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-24.5 (+09.5)  
  FN 3.5% Coupon   99-07.5 (+06)  
  Support   3.111%  
  Resistance   2.759%  
Thursday, June 21, 2018
Treasuries are higher across the curve this morning from yesterday’s close. The UST 10-Year yield is currently at 2.898% after closing at 2.940% prior.

Treasuries rallied overnight and into the open as concerns grew over the outlook for global trade and growth while investors digested Daimler AG’s comments. The German automotive corporation predicts that a continuing escalation of trade war tensions between U.S. and China would crimp earnings. Treasuries also gained on headlines from Italy as politics again pressured Italian assets after two prominent critics of the EU were appointed to lead the finance and budget committees. U.S. Stocks declined and the dollar weakened as Treasury yields inched lower.

This morning we received the Initial Jobless Claims for the week ended June 16 which fell 3k to 218k from an upwardly revised 221k prior. Continuing Claims for the week ended June 9 rose 22k to 1723k from an upwardly revised 1701k prior. We also received the Philadelphia Fed Business Outlook for the month of June which fell lower than expected to 19.90 from 34.40 prior; consensus called for a slight drop of the index to 29.00. The FHFA House Price Index for April was also on the calendar and reported a 0.10% increase month-over-month following an upwardly revised increase of 0.20% in March. Later today at 10:00 AM (PT), U.S. will auction $5 Billion 30-Year TIPS Reopening.

The curve has bull-flattened with the UST 10-Year yield down 4.2 bps from prior closing.
This Week's Events
  06/18 NAHB Housing Market Index 07:00 Jun 70.00 68.00 70.00 -  
  06/19 Housing Starts 05:30 May 1311k 1350k 1287k 1286k  
  06/19 Housing Starts MoM 05:30 May 1.90% 5.00% -3.70% -3.10%  
  06/19 Building Permits 05:30 May 1350k 1301k 1352k 1364k  
  06/19 Building Permits MoM 05:30 May -1.00% -4.60% -1.80% -0.90%  
  06/20 MBA Mortgage Applications 04:00 15 Jun - 5.10% -1.50% -  
  06/20 Existing Home Sales 07:00 May 5.52m 5.43m 5.46m 5.45m  
  06/20 Existing Home Sales MoM 07:00 May 1.10% -0.40% -2.50% -2.70%  
  06/21 Initial Jobless Claims 05:30 16 Jun 220k 218k 218k 221k  
  06/21 Continuing Claims 05:30 9 Jun 1710k 1723k 1697k 1701k  
  06/21 Philadelphia Fed Business Outlook 05:30 Jun 29.00 19.90 34.40 -  
  06/21 FHFA House Price Index MoM 06:00 Apr 0.50% 0.10% 0.10% 0.20%  
  06/21 Bloomberg Consumer Comfort 06:45 17 Jun - 56.50 55.80 -  
  06/21 Leading Index 07:00 May 0.40% 0.20% 0.40% -  
  06/22 Markit US Manufacturing PMI 06:45 Jun P 56.10 - 56.40 -  
  06/22 Markit US Services PMI 06:45 Jun P 56.50 - 56.80 -  
  06/22 Markit US Composite PMI 06:45 Jun P - - 56.60 -  
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