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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   106-28 (+31)  
  FN 3.5% Coupon   102-29 (+04.5)  
  Support   3.237%  
  Resistance   1.611%  
Wednesday, August 07, 2019
Treasury Yields Slide as Global Bonds Surge
Market opened today’s session with treasuries rallying across all maturities. 10-Year Treasury yield is at 1.6114, 9.09 bps decreased from prior closing of 1.7023.

Central banks around the globe stunned investors by cutting their rates on fear over trade and currency wars. US stock index futures slumped and bonds rallied globally as investors continued to seek safe haven, fearing the ongoing trade tension will spur a global recession. New Zealand surprised by cutting their benchmark rate by 50 bps when a 25 bps cut had been expected. Also, Thailand cut their rate by 25 bps, and India lowered their rate by an unconventional 35 bps. These dovish actions fueled by concerns of the escalating trade war, sent the yield on 30-year US Treasury south, closing in on their all-time low of 2.0882% from July 2016. German rates also dropped to a fresh record as industrial production printed the biggest annual decline in almost a decade. President Trump reiterated his stance by urging the Fed to cut rates “bigger and faster” in his tweet. Elsewhere, WTI crude extended a loss this morning, trading below $52 a barrel. MBA Mortgage Applications Index rose 5.30% last week after falling 1.40% in prior week. Purchases declined 2.00% and refinances increased 11.80% after falling 3.00% and rising 0.10% in prior week, respectively. Later today, the US Treasury is scheduled to auction off $27 billion of 10-year notes at 10:00 AM (PT).

The curve has bull-flattened with UST 10-Year yield down 9.09 bps.
This Week's Events
  08/05 Markit US Services PMI 06:45 Jul F 52.20 53.00 52.20 -  
  08/05 Markit US Composite PMI 06:45 Jul F - 52.60 51.60 -  
  08/06 JOLTS Job Openings 07:00 Jun 7326 7348 7323 7384  
  08/07 MBA Mortgage Applications 04:00 2 Aug - 5.30% -1.40% -  
  08/08 Initial Jobless Claims 05:30 3 Aug 215k - 215k -  
  08/08 Continuing Claims 05:30 27 Jul 1690k - 1699k -  
  08/08 Bloomberg Consumer Comfort 06:45 4 Aug - - 64.70 -  
  08/08 Wholesale Inventories MoM 07:00 Jun F 0.20% - 0.20% -  
  08/09 PPI Final Demand MoM 05:30 Jul 0.20% - 0.10% -  
  08/09 PPI Final Demand YoY 05:30 Jul 1.70% - 1.70% -
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