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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   100-25.5 (-07)  
  FN 3.5% Coupon   102-24.5 (-01.5)  
  Support   3.237%  
  Resistance   1.529%  
Monday, October 07, 2019
Treasury Yields Increase - Trade Negotiations Resume Oct. 10th
Market opened today’s session with treasuries lower across all maturities. 10-Year Treasury yield is at 1.5375, 0.85 bps increased from prior closing of 1.5290.

Trade talks between the US and China are scheduled to resume October 10th. Vice Premier Liu He, who will be leading negotiations for China, stated that his offer to the US will not include commitments on reforming Chinese industrial policy or government subsidies. As a result of the increasing doubts surrounding the US-China trade negotiations, the Dow Jones fell 100, S&P 500 slid 0.40% and the Nasdaq Composite dropped 0.30%; industrial was the biggest decliner amount S&P 500 sectors, losing 0.60%. The Dow and S&P 500 posted their third straight weekly decline after the Institute for Supply Management published some disappointing US economic data showing manufacturing activity falling to its lowest level in a decade, while the services sector grew at its slowest pace in more than three years. A second whistleblower has come forward with concerns about Trump’s interactions with Ukraine. The whistleblower is reported to have first-hand knowledge of allegations listed in the previous whistleblower’s complaint, which initiated an official impeachment inquiry in the House of Representatives. The yield on 10-Year Treasuries increased one basis point to 1.54%. The US Treasury will auction $45 billion in three-month bills, and $42 billion in six-month bills.

This morning a federal judge dismissed Trump’s lawsuit seeking to block the release of his personal and corporate tax returns related to a criminal investigation into Trump’s company. Trump’s attorney asked the US Circuit Court of Appeals to block the judge’s ruling from taking effect, and requested that the grand jury subpoena for eight years worth of his personal and corporate tax returns be dismissed. General Electric announced that it would be freezing pension plans for about 20,000 US employees with salaried benefits, in an attempt to cut debt and reduce its pension deficit by up to $8 billion. GE had total borrowings of about $105.80 billion as of June 30th, with industrial net debt at $54.40 billion. The company also announced that it would also be freezing supplementary pension benefits for about 700 US employees who became executives before 2011. The freeze will be effective January 1, 2021.

The curve has bear-flattened with UST 10-Year yield up 0.85 bps.
This Week's Events
  10/07 Monthly Budget Statement 11:00 Sep $96.50b - $119.10b -  
  10/07 Consumer Credit 12:00 Aug $15.000b - $23.294b -  
  10/08 NFIB Small Business Optimism 03:00 Sep 102.00 - 103.10 -  
  10/08 PPI Final Demand MoM 05:30 Sep 0.10% - 0.10% -  
  10/08 PPI Final Demand YoY 05:30 Sep 1.80% - 1.80% -  
  10/09 MBA Mortgage Applications 04:00 4 Oct - - 8.10% -  
  10/09 JOLTS Job Openings 07:00 Aug 7250 - 7217 -  
  10/09 Wholesale Trade Sales MoM 07:00 Aug - - 0.30% -  
  10/09 Wholesale Inventories MoM 07:00 Aug F 0.40% - 0.40% -  
  10/09 FOMC Meeting Minutes 11:00 18 Sep - - - -  
  10/10 CPI MoM 05:30 Sep 0.10% - 0.10% -  
  10/10 CPI YoY 05:30 Sep 1.80% - 1.70%    
  10/10 Initial Jobless Claims 05:30 5 Oct 220k - 219k -  
  10/10 Continuing Claims 05:30 28 Oct 1651k - 1651k -  
  10/10 Bloomberg Consumer Comfort 06:45 6 Oct - - 62.00 -  
  10/11 Import Price Index MoM 05:30 Sep 0.00% - -0.50% -  
  10/11 Import Price Index YoY 05:30 Sep -2.10% - -2.00% -  
  10/11 Export Price Index MoM 05:30 Sep 0.00% - -0.60% -  
  10/11 Export Price Index YoY 05:30 Sep - - -1.40% -  
  10/11 U. of Mich. Sentiment 07:00 Oct P 92.00 - 93.20 -
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