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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   98-31 (+01)  
  FN 3.5% Coupon   98-18 (00)  
  Support   3.111%  
  Resistance   2.810%  
Monday, September 17, 2018
Treasuries are slightly lower across the curve this morning from Friday's close. The UST 10-Year yield is currently at 3.004% after closing at 2.997% prior.

Treasuries moved lower overnight and opened this week's session in the red ahead of a fairly quiet economic calendar. The 10-Year yield has sustained its level above 3.00% after breaching it during Friday's session. This morning the markets remain focused on concerns about further escalation of the U.S.-China trade dispute as investors await the Trump administration's announcement of imposing a 10 percent tariff on another $200 Billion Chinese goods. China is expected to retaliate upon the announcement of the fresh new round of tariffs from the White House. On economic reports, we received the Empire Manufacturing Survey which dropped more than expected from 25.60 in August to 19.00 in September; consensus called for the index to decline to 23.00 MoM.

The remainder of this week's economic calendar will primarily be focused on housing reports. Tomorrow we will receive the September NAHB Housing Market Index along with the July Total Net and Net Long-term TIC Flows. On Wednesday, we will receive the Housing Starts and Building Permits data for August, and on Thursday we will have the August Existing Home Sales index. Then on Friday, we will have the preliminary readings of the September Markit US Manufacturing, Services and Composite PMI. Also ahead this week, the Bank of Japan will announce its latest monetary policy decision on Wednesday. Lastly, the U.S. is scheduled to auction 10-Year TIPS reopening on Thursday.

The curve has bear-steepened with the UST 10-Year yield up 0.7 bp from prior closing.
This Week's Events
  09/17 Empire Manufacturing 05:30 Sep 23.00 19.00 25.60 -  
  09/18 NAHB Housing Market Index 07:00 Sep 66.00 - 67.00 -  
  09/18 Total Net TIC Flows 13:00 Jul - - $114.50b -  
  09/18 Net Long-term TIC Flows 13:00 Jul - - -$36.50b -  
  09/19 MBA Mortgage Applications 04:00 14 Sep - - -1.80% -  
  09/19 Housing Starts 05:30 Aug 1235k - 1168k -  
  09/19 Housing Starts MoM 05:30 Aug 5.70% - 0.90% -  
  09/19 Building Permits 05:30 Aug 1310k - 1311k 1303k  
  09/19 Building Permits MoM 05:30 Aug 0.50% - 1.50% 0.90%  
  09/20 Philadelphia Fed Business Outlook 05:30 Sep 15.80 - 11.90 -  
  09/20 Initial Jobless Claims 05:30 15 Sep 210k - 204k -  
  09/20 Continuing Claims 05:30 8 Sep 1705k - 1696k -  
  09/20 Bloomberg Consumer Comfort 06:45 16 Sep - - 59.00 -  
  09/20 Leading Index 07:00 Aug 0.50% - 0.60% -  
  09/20 Existing Home Sales 07:00 Aug 5.38m - 5.34m -  
  09/20 Existing Home Sales  MoM 07:00 Aug 0.80% - -0.70% -  
  09/21 Markit US Manufacturing PMI 06:45 Sep P 55.00 - 54.70 -  
  09/21 Markit US Services PMI 06:45 Sep P 55.00 - 54.80 -  
  09/21 Markit US Composite PMI 06:45 Sep P - - 54.70 -  
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