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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   102-26 (-17)  
  FN 3.5% Coupon   102-04.5 (-09.5)  
  Support   3.237%  
  Resistance   1.975%  
Friday, June 21, 2019
Treasury Yields Drift on US-Iranian Tensions
Market opened today’s session with treasuries nearly unchanged across all maturities. 10-Year Treasury yield is at 2.0522, 2.38 bps increased from prior closing of 2.0284.

Stocks slipped for the first time in five days after the S&P 500 setting an intraday record high of 2,958.06 in the previous session as investors welcomed the Fed’s dovish signals. Both Treasuries and the dollar steadied as tensions between the US and Iran intensified. It was reported earlier this week that Iran shot down an American drone, and a White House official confirmed that the US called off military strikes against Iran which was previously approved by President Trump in retaliation for downing the drone on Thursday night. Oil initially fluctuated on the news and headed for its biggest weekly gain since 2016 as the conflict added to ongoing concerns over oil productions and could potentially disrupt the energy supplies. Next week, all eyes will be back on the trade as President Trump and his Chinese counterpart Xi are scheduled to meet at the G-20 summit in Japan.

Markit US Manufacturing PMI index printed 50.10 vs. both consensus and prior readings of 50.50. Both Markit US Services PMI and Composite PMI edged lower to 50.70 and 50.60 from prior readings of 50.90, respectively. Lastly, Existing Home Sales in May climbed to 5.34 million from an upwardly revised prior of 5.21 million while consensus called for 5.30 million. Later today, Cleveland Fed President Mester and Fed Governor Brainard will partake in a Fed Listens event in Cincinnati.

The curve has bear-steepened with UST 10-Year yield up 2.38 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 - -3.40% 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 10.40 0.30 16.60 -  
  06/20 Initial Jobless Claims 05:30 15 Jun 220k 216k 222k -  
  06/20 Continuing Claims 05:30 8 Jun 1680k 1662k 1695k 1699k  
  06/20 Bloomberg Consumer Comfort 06:45 16 Jun - 61.80 61.60 -  
  06/20 Leading Index 07:00 May 0.10% 0.00% 0.20% 0.10%  
  06/21 Markit US Manufacturing PMI 06:45 Jun P 50.50 50.10 50.50 -  
  06/21 Markit US Services PMI 06:45 Jun P 51.00 50.70 50.90 -  
  06/21 Markit US Composite PMI 06:45 Jun P - 50.60 50.90 -  
  06/21 Existing Home Sales 07:00 May 5.30m 5.34m 5.19m 5.21m  
  06/21 Existing Home Sales MoM 07:00 May 2.10% 2.50% -0.40% -
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