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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-11 (+10)   
  FN 3.5% Coupon   96-27 (+05)  
  Support   3.237%  
  Resistance   3.048%  
Friday, November 09, 2018
Treasuries are slightly higher across the curve this morning from yesterday’s close. The UST 10-Year yield is currently at 3.207% after closing at 3.238% prior.

Treasuries gained some momentum overnight to open today’s session higher as risk-off mode set the tone after U.S. equities fell with oil. Crude oil slid into a bear market as it heads for the longest losing streak on record. Growing concerns over the health of China’s economy also weighed on global stocks. Yesterday the Federal Reserve announced to keep the interest rates unchanged as expected, but reiterated its intent to stay on course with its gradual rate hike path, signaling that the next hike will be in December. The Fed acknowledged the strong economic outlook supported by strong job gains and a drop in the unemployment rate. The dollar strengthened after the Fed indicated that borrowing costs will continue to rise; the greenback extended gains this morning after reports showed that producer prices rose more than expected in October.

The October PPI Final Demand increased 0.60% MoM following a 0.20% gain prior and exceeded the consensus called for a 0.20% rise; PPI Final Demand YoY rose to 2.90% from 2.60% prior. Excluding food and energy, producer prices rose 0.50% MoM versus an expected 0.20% increase, bringing its YoY index to 2.60% from 2.50% prior. We also received the September Wholesale Inventories which rose 0.40% MoM following a 0.30% gain prior, while Wholesale Trade Sales rose just 0.20% MoM following a revised 0.70% gain prior. Also on the calendar, the preliminary reading of the November University of Michigan Sentiment ticked down to 98.30 from 98.60 prior. Lastly, Fed speeches resume today with New York Fed President Williams, Philadelphia Fed President Harker and Fed Vice Chairman Quarles.

The curve has bull-flattened with the UST 10-Year yield down 3.1 bps from prior closing.

Have A Wonderful Weekend!
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% 2.25% -  
  11/08 FOMC Rate Decision (Lower Bound) 11:00 8 Nov 2.00% 2.00% 2.00% -  
  11/09 PPI Final Demand MoM 05:30 Oct 0.20% 0.60% 0.20% -  
  11/09 PPI Final Demand YoY 05:30 Oct 2.50% 2.90% 2.60% -  
  11/09 U. of Mich. Sentiment 07:00 Nov P 98.00 98.30 98.60 -  
  11/09 Wholesale Inventories MoM 07:00 Sep F 0.30% 0.40% 0.30% -  
  11/09 Wholesale Trade Sales MoM 07:00 Sep 0.40% 0.20% 0.80% 0.70%  
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