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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   98-13 (+0.5)  
  FN 3.5% Coupon   98-08.5 (00)  
  Support   3.111%  
  Resistance   2.810%  
Friday, September 21, 2018
Treasuries are slightly lower across the curve this morning from yesterday's close. The UST 10-Year yield is currently at 3.066% after closing at 3.064% prior.

Treasuries resumed its downward trend overnight and into the open while global investors continued to push equities higher, and U.S. stocks remained on the rise. The markets have primarily focused on global trade talks this week, but investors will shift their attention to central banks next week as the September FOMC meeting kicks off on Tuesday. The latest Fed monetary policy decision will be announced at the conclusion of the meeting on Wednesday, and will be followed by a press conference featuring Fed Chairman Powell. If the Fed announces a hike in interest rate, it would be the third increase in 2018, and would mark the eighth rate hike since December of 2015. With the recent run of economic reports reflecting a sustained economic growth and a tight labor market, most investors expect the Fed to reveal more of a hawkish than dovish tone at the conclusion of its meeting.

The economic calendar was fairly quiet this week and ends with only the preliminary September reports on manufacturing and service activity from Markit. Markit US Manufacturing PMI rose higher than expected at 55.60 versus 55.00 per consensus from its prior unrevised mark of 54.70. Markit US Services PMI unexpectedly lowered to 52.90 from its previous mark of 54.80 while consensus called for a slight increase to 55.00. Lastly, Markit US Composite PMI dropped back slightly to 53.40 from its previous mark of 54.70. There are no Fed speakers heading into next week's FOMC meeting, but Fedspeak will resume late next week and will feature Dallas Fed President Kaplan and Fed Chairman Powell on Thursday, and Richmond Fed President Barkin and New York Fed President Williams on Friday.

The curve has bear-flattened with the UST 10-Year yield up 0.2 bp from prior closing.

Have A Wonderful Weekend!
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 67.00 -  
  09/18 Total Net TIC Flows 13:00 Jul $46.00b $52.20b $114.50b $189.70b  
  09/18 Net Long-term TIC Flows 13:00 Jul - $74.80b -$36.50b -  
  09/19 MBA Mortgage Applications 04:00 14 Sep - 1.60% -1.80% -  
  09/19 Housing Starts 05:30 Aug 1240k 1282k 1168k 1174k  
  09/19 Housing Starts MoM 05:30 Aug 5.70% 9.20% 0.90% -0.30%  
  09/19 Building Permits 05:30 Aug 1310k 1229k 1311k 1303k  
  09/19 Building Permits MoM 05:30 Aug 0.50% -5.70% 1.50% 0.90%  
  09/20 Philadelphia Fed Business Outlook 05:30 Sep 18.00 22.90 11.90 -  
  09/20 Initial Jobless Claims 05:30 15 Sep 210k 201k 204k -  
  09/20 Continuing Claims 05:30 8 Sep 1705k 1645k 1696k -  
  09/20 Bloomberg Consumer Comfort 06:45 16 Sep - 60.20 59.00 -  
  09/20 Leading Index 07:00 Aug 0.50% 0.40% 0.60% 0.70%  
  09/20 Existing Home Sales 07:00 Aug 5.37m 5.34m 5.34m -  
  09/20 Existing Home Sales  MoM 07:00 Aug 0.50% 0.00% -0.70% -  
  09/21 Markit US Manufacturing PMI 06:45 Sep P 55.00 55.60 54.70 -  
  09/21 Markit US Services PMI 06:45 Sep P 55.00 52.90 54.80 -  
  09/21 Markit US Composite PMI 06:45 Sep P - 53.40 54.70 -  
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