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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-07 (+05.5)   
  FN 3.5% Coupon   96-31 (+03.5)  
  Support   3.236%  
  Resistance   3.028%  
Thursday, November 08, 2018
Treasuries are higher across the curve this morning from yesterday’s close. The UST 10-Year yield is currently at 3.211% after closing at 3.236% prior.

Treasuries opened slightly higher to start the session ahead of the FOMC policy decision despite a quiet overnight trading volume overall. Treasury yields gradually inched lower overnight to erase a portion of yesterday’s late-session rise that saw the benchmark yields at the highest level since 2011. Meanwhile, the rally in global equities faded during the overnight session as investors shifted their focus from Tuesday’s U.S. midterm election results to Thursday’s Federal Reserve decision. The Fed is not expected to raise interest rates at the conclusion of today’s meeting, but investors will be looking for any clues on the Fed’s current pace of policy tightening heading into 2019.

On today’s economic calendar, we received the Initial Jobless Claims for the week ended November 3 which came in line with expectations at 214k following a slight upwardly revised 215k the week prior. Jobless Claims have hovered around the range of 210k to 216k over the past five weeks despite a major hurricane that should have skewed the data. Moreover, Continuing Claims for the week ended October 27 fell 8k to 1623k from an unrevised 1631k the prior week. Consensus called for a slight increase to 1634k so the data came in below expectations; this is the lowest count of continuing claims since July 1973. Lastly, we received the Bloomberg Consumer Comfort for the week ended November 4 which showed a slight increase to 61.30 from 60.30 the week prior.

The curve has bull-flattened with the UST 10-Year yield down 2.5 bps from prior closing.
This Week's Events
  11/05 Markit US Services PMI 06:45 Oct F 54.60 54.80 54.70 -  
  11/05 Markit US Composite PMI 06:45 Oct F - 54.90 54.80 -  
  11/06 JOLTS Job Openings 07:00 Sep 7085 7009 7136 7293  
  11/07 MBA Mortgage Applications 04:00 2 Nov - -4.00% -2.50% -  
  11/08 Initial Jobless Claims 05:30 3 Nov 214k 214k 214k 215k  
  11/08 Continuing Claims 05:30 27 Oct 1634k 1623k 1631k -  
  11/08 Bloomberg Consumer Comfort 06:45 4 Nov - 61.30 60.30 -  
  11/08 FOMC Rate Decision (Upper Bound) 11:00 8 Nov 2.25% - 2.25% -  
  11/08 FOMC Rate Decision (Lower Bound) 11:00 8 Nov 2.00% - 2.00% -  
  11/09 PPI Final Demand MoM 05:30 Oct 0.20% - 0.20% -  
  11/09 PPI Final Demand YoY 05:30 Oct 2.50% - 2.60% -  
  11/09 U. of Mich. Sentiment 07:00 Nov P 98.00 - 98.60 -  
  11/09 Wholesale Inventories MoM 07:00 Sep F 0.30% - 0.30% -  
  11/09 Wholesale Trade Sales MoM 07:00 Sep 0.40% - 0.80% -  
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