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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-15.5 (+065)  
  FN 3.5% Coupon   99-09.5 (+05)  
  Support   3.111%  
  Resistance   2.813%  
Thursday, August 09, 2018
Treasuries are higher across the curve this morning from yesterday's close. The UST 10-Year yield is currently at 2.934% after closing at 2.955% prior.

Treasuries moved higher at the start of today's session sparked by the ongoing trade dispute between U.S. and China. Yesterday China announced its decision to move forward with imposing 25 percent tariffs on the remaining $16 billion of U.S. imports from the $50 Billion initially proposed. Oil prices took a plunge yesterday on the announcement that the remaining tariffs, which will take effect on August 23, is set to include petroleum products. The dollar advanced with Treasuries, while U.S. Stocks were mixed overnight. On the economic calendar, we received the PPI Final Demand which was unchanged in July following a 0.30% rise in June, bringing its YoY to 3.30% versus 3.40% prior. PPI excluding Food and Energy rose 0.10% MoM following a 0.30% increase in June, bringing its YoY to 2.70% versus 2.80% prior.

We also received the Initial Jobless Claims for the week ended August 4 which fell 6k to 213k from a slightly revised 219k the week prior. Continuing Claims for the week ended July 28 rose 29k to 1755k from an upwardly revised 1726k the week prior. The recent run of low Jobless Claims continue to reflect a very tight labor market and remains consistent with the Fed's latest Beige Book and Monetary Policy Report. Lastly, we received the June Wholesale Inventories which rose 0.10% MoM after remaining unchanged prior. Later today at 10:00 AM (PT), U.S. will sell $18 Billion of 30-Year Bonds.

The curve has bull-flattened with the UST 10-Year yield down 2.1 bps from prior closing.
This Week's Events
  08/06 No Data - - - - - -  
  08/07 JOLTS Job Openings 07:00 Jun 6625 6662 6638 6659  
  08/08 MBA Mortgage Applications 04:00 3 Aug - -3.00% -2.60% -  
  08/09 Initial Jobless Claims 05:30 4 Aug 220k 213k 218k 219k  
  08/09 Continuing Claims 05:30 28 Jul 1730k 1755k 1724k 1726k  
  08/09 PPI Final Demand MoM 05:30 Jul 0.20% 0.00% 0.30% -  
  08/09 PPI Final Demand YoY 05:30 Jul 3.40% 3.30% 3.40% -  
  08/09 Bloomberg Consumer Comfort 06:45 5 Aug - 59.30 58.60 -  
  08/09 Wholesale Inventories MoM 07:00 Jun F 0.00% 0.10% 0.00% -  
  08/09 Wholesale Trade Sales MoM 07:00 Jun 0.20% -0.10% 2.50% 2.10%  
  08/10 CPI MoM 05:30 Jul 0.20% - 0.10% -  
  08/10 CPI YoY 05:30 Jul 2.90% - 2.90% -  
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