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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   98-20 (-08)  
  FN 3.5% Coupon   102-10.5 (-01.5)  
  Support   3.237%  
  Resistance   1.529%  
Monday, October 21, 2019
Treasury Yields Increase With Brexit Optimism
Market opened today’s session with treasuries lowered across all maturities. The 10-Year Treasury yield is currently at 1.7729, 1.93 bps increased from prior closing of 1.7536.

US stocks were slightly higher this morning amid optimism around US-China trade talks and Brexit. The Dow Jones pointed to a gain of 54 points at the open, the S&P 500 and Nasdaq 100 were both slightly higher as well; the S&P 500 is about 1% below it all-time high. 120 S&P 500 companies are scheduled to release their quarterly earnings results this week. More than 14% of S&P 500 companies have already reported their results, and of those companies, 81% posted earnings that exceeded expectations. UK Prime Minister, Boris Johnson, pushed for a Brexit extension - marking the third time the government has requested an extension - after Parliament postponed a vote on Saturday to approve a deal on the country’s separation from the European Union. This week the full Withdrawal Agreement Bill will be presented to both chambers of the government- the House of Commons and the House of Lords. In Europe, gains for mining and banking shares helped drive the Stoxx Europe 600 Index higher. The pound climbed to its strongest level since May. The yield on 10-Year Treasuries increased two basis points to 1.78%. The US Treasury will auction $45 billion in three-month bills, and $42 billion in six-month bills.

German prosecutors are probing former Deutsche Bank co-Chief Executive Anshu Jain and 78 other current and former bank officials as part of an investigation into a dividend tax-stripping scheme. This investigation comes after two British investment bankers were arrested for their part in the tax fraud scheme, which allowed them to collect hundreds of millions of dollars from tax payers. Boeing saw its stock fall 6.79% on Friday to $344 after an announcement from the Federal Aviation Administration that Boeing withheld concerning messages from 2016 between employees about a flight control system implicated in two crashes of the 737 Max. Boeing and the FAA are facing several investigations into the planes design and software. Boeing CEO, Dennis Muilenburg, is scheduled to testify in front of Congress later this month.

The curve has bear-steepened with the UST 10-Year yield up 1.93 bps from prior closing.
This Week's Events
  10/21 No Data - - - - - -  
  10/22 Richmond Fed ManufactIndex 07:00 Oct -7.00 - -9.00 -  
  10/22 Existing Home Sales 07:00 Sep 5.45m - 5.49m -  
  10/22 Existing Home Sales MoM 07:00 Sep -0.70% - 1.30% -  
  10/23 MBA Mortgage Applications 04:00 18 Oct - - 0.50% -  
  10/23 FHFA House Price Index MoM 06:00 Aug 0.30% - 0.40% -  
  10/24 Initial Jobless Claims 05:30 19 Oct 215k - 214k -  
  10/24 Continuing Claims 05:30 12 Oct 1675k - 1679k -  
  10/24 Durable Goods Orders 05:30 Sep P -0.70% - 0.20% -  
  10/24 Durables Ex Transportation 05:30 Sep P -0.20% - 0.50% -  
  10/24 Bloomberg Consumer Comfort 06:45 20 Oct - - 63.50 -  
  10/24 Markit US Manufacturing PMI 06:45 Oct P 50.80 - 51.10 -  
  10/24 Markit US Services PMI 06:45 Oct P 51.00 - 50.90 -  
  10/24 Markit US Composite PMI 06:45 Oct P - - 51.00 -  
  10/24 New Home Sales 07:00 Sep 701k - 713k -  
  10/24 New Home Sales MoM 07:00 Sep -1.70% - 7.10% -  
  10/24 Kansas City Fed ManfActivity 08:00 Oct -4.00 - -2.00 -  
  10/25 U. of Mich. Sentiment 07:00 Oct F 96.00 - 96.00 -
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