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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   98-21 (-13.5)  
  FN 3.5% Coupon   102-20 (-00.5)  
  Support   3.237%  
  Resistance   1.529%  
  Monday, November 4, 2019

Treasury Yields Increased Due to Trade Optimism

Market opened today’s session with treasuries lowered across all maturities. The 10-Year Treasury yield is currently at 1.7735, 6.32 bps increased from prior closing of 1.7103.

The Dow Jones rose 128 points, hitting an all-time high for the first time since July. The S&P 500 and Nasdaq Composite advanced 0.50% and 0.70%, respectively. The S&P 500 and Nasdaq Composite reached their own record highs last week after the Federal Reserve cut interest rates by 25 basis points last week. Optimism around trade negotiations was renewed after US Commerce Secretary, Wilbur Ross, announced that American firms would be granted licenses to sell to Huawei, a Chinese telecommunications company. The yield on 10-Year Treasuries climbed five basis points to 1.76%. Britain’s 10-Year yield climbed two basis points to 0.683%. Germany’s 10-Year yield rose one basis point to -0.37%. Australia’s 10-Year yield gained one basis point  to 1.18%. West Texas Intermediate crude oil increased 1.00% to $56.75 a barrel. Today the US Treasury will auction $45 billion in 3-month bills, and $42 billion in 6-month bills.

In a vote of 232-196, House members authorize the impeachment inquiry and establish guidelines for the public hearings, which could begin as early as this month, according to House Speaker Nancy Pelosi. In a recent survey, 49.00% of Americans support the impeachment inquiry led by Democrats and want to see Trump removed from office, while 46.00% of Americans oppose it. In a recent GDP report, durable goods orders fell 1.20% in September with an 11.80% drop in nondefense aircraft orders. Excluding transportation, durable goods orders declined 0.40% and defense orders decreased 4.50%. McDonald’s stock fell after the board fired its Chief Executive Officer, Steve Easterbrook, for violating company policy by having a relationship with an employee; stocks were down 1.90% at the open this morning.

The curve has bear-steepened with the UST 10-Year yield up 6.32 bps from prior closing.
This Week's Events
  11/04 Factory Orders 07:00 Sep -0.50% -0.60% -0.10% -  
  11/04 Durable Goods Orders 07:00 Sep F -1.10% -1.20% -1.10% -  
  11/04 Durables Ex Transportation 07:00 Sep F -0.30% -0.40% -0.30% -  
  11/05 Trade Balance 05:30 Sep -52.40b - -54.90b -  
  11/05 Markit US Services PMI 06:45 Oct F 51.00 - 51.00 -  
  11/05 Markit US Composite PMI 07:00 Oct F - - 51.20 -  
  11/05 JOLTS Job Openings 07:00 Sep 7063 - 7051 -  
  11/06 MBA Mortgage Applications 04:00 1 Nov - - 0.60% -  
  11/06 Nonfarm Productivity 05:30 3Q P 0.90% - 2.30% -  
  11/06 Unit Labor Costs 05:30 3Q P 2.20% - 2.60% -  
  11/07 Initial Jobless Claims 05:30 2 Nov 215k - 218k -  
  11/07 Continuing Claims 05:30 26 Oct 1680k - 1690k -  
  11/07 Bloomberg Consumer Comfort 06:45 3 Nov - - 61.00 -  
  11/07 Consumer Credit 12:00 Sep $15.000b - $17.901b -  
  11/08 Wholesale Inventories MoM 07:00 Sep F -0.30% - -0.30% -  
  11/08 Wholesale Trade Sales MoM 07:00 Sep 0.20% - 0.00% -  
  11/08 U. of Mich. Sentiment 07:00 Nov P 95.50 - 95.50 -
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