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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   102-27 (-06)  
  FN 3.5% Coupon   102-07.5 (-02)  
  Support   3.237%  
  Resistance   1.939%  
Tuesday, July 09, 2019
Treasury Yields Rise ahead of Powell’s Testimony Tomorrow
Market opened today’s session with treasuries edging lower across all maturities. 10-Year Treasury yield is at 2.0579, 1.03 bps increased from prior closing of 2.0476.

US stock futures extended declines as investors await clues on whether easier monetary policy will take place later this month. Treasuries drifted and the dollar strengthened to its highest level since mid-June. Market may continue to be choppy ahead of key testimony from Fed Chair Powell before the House Financial Services Committee tomorrow. Traders had priced in a high probability of a rate cut this month but recent economic data including the jobs report last week conflicted with the prospect of easing policy, making the path for future policy less clear. Many Fed’s officials are scheduled to speak today including Fed Chair Powell. He gave opening remarks at a Boston Fed conference on stress testing earlier this morning. Fed Vice Chair Quarles will also give a speech at the same conference later today, and St. Louis Fed President Bullard and Atlanta Fed President Bostic will speak at an event at Washington University in St. Louis. Elsewhere, WTI crude edged higher following a report that Russia’s output declined.

NFIB Small Business Optimism in June slid to 103.30 from 105.00 in May, slightly above consensus of 103.10. JOLTS Job Openings in May also dropped to 7323 vs. 7470 consensus following a downwardly revised prior of 7372. Later today, the US Treasury is scheduled to auction off $38 billion of 3-year Notes at 10:00 AM (PT).

The curve has bear-steepened with UST 10-Year yield up 1.03 bps.
This Week's Events
  07/08 Consumer Credit 12:00 May $17.000b - $17.497b -  
  07/09 NFIB Small Business Optimism 03:00 Jun 103.10 103.30 105.00 -  
  07/09 JOLTS Job Openings 07:00 May 7470 7323 7449 7372  
  07/10 MBA Mortgage Applications 04:00 5 Jul - - -0.10% -  
  07/10 Wholesale Trade Sales MoM 07:00 May 0.30% - -0.40% -  
  07/10 Wholesale Inventories MoM 04:00 May F 0.40% - 0.40% -  
  07/10 FOMC Meeting Minutes 11:00 19 Jun - - - -  
  07/11 CPI MoM 05:30 Jun 0.00% - 0.10% -  
  07/11 CPI YoY 05:30 Jun 1.60% - 1.80% -  
  07/11 Initial Jobless Claims 05:30 6 Jul 221k - 221k -  
  07/11 Continuing Claims 05:30 29 Jun 1683k - 1686k -  
  07/11 Bloomberg Consumer Comfort 06:45 7 Jul - - 62.60 -  
  07/11 Monthly Budget Statement 11:00 Jun -$7.70b - -$207.80b -  
  07/12 PPI Final Demand MoM 05:30 Jun 0.00% - 0.10% -  
  07/12 PPI Final Demand YoY 05:30 Jun 1.60% - 1.80% -
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