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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-17 (+09.5)  
  FN 3.5% Coupon   102-23 (+03.5)  
  Support   3.063%  
  Resistance   1.691%  
Monday, November 18, 2019
Treasury Yields and Trade Optimism Continue to Decline
Market opened today’s session with treasuries rallying across all maturities. The 10-Year Treasury yield is currently at 1.8066, 2.42 bps decreased from prior closing of 1.8308.

Stocks took a tumble this morning as investors grow more uncertain about the ongoing trade talks. The Dow Jones, S&P 500, and Nasdaq Composite slipped 0.10%, 0.10%, and 0.20%, respectively. The US has still not officially made a decision on Chinas request to remove the existing tariffs; a stipulation from China in order to move forward with the interim trade deal. Trump has previously stated that he does not think the US will agree to those terms and still expects the countries to move forward with the interim trade deal. The yield on 10-Year Treasuries slipped one basis point to 1.82%. Britains 10-Year yield rose two basis points to 0.74%. Germanys 10-Year yield also decreased one basis point to -0.34%. Italys 10-Year yield fell five basis points to 1.18%. The US Treasury will auction $45 billion in three-month bills, and $42 billion in six-month bills, November 18th. West Texas Intermediate crude oil decreased 0.70% to $57.31 a barrel. Gold decreased 0.20% to $1,465.56 an ounce.

Trade uncertainty continues to affect oil prices. Brent crude futures fell 0.80% to $62.81 a barrel, compared to the 1.30% rise recorded last week. The Organization of the Petroleum Exporting Countries (OPEC) is scheduled to meet in Vienna December 5-6 to discuss the expected output policy. OPEC announced last week that it is expecting the demand for oil to fall in 2020. Boeing has struggled this past year due to the 2 fatal 737 Max crashes, which killed 346 people. However, Turkish-based airline, SunExpress, recently placed an order for ten 737 Max planes worth about $1.2 billion, in addition to the 32 planes they ordered previously. As the public impeachment inquiry into the Trump administration continues, House Speaker Nancy Pelosi extended an invitation to Trump so he could provide his testimony. Trump has maintained that he did nothing wrong and announced that he may be open to testifying, either publicly or via written statement.

The curve has bull-flattened with the UST 10-Year yield down 2.42 bps from prior closing.
This Week's Events
  11/18 NAHB Housing Market Index 07:00 Nov 71.00 70.00 71.00 -  
  11/18 Net Long-term TIC Flows 13:00 Sep - - -$41.10b -  
  11/18 Total Net TIC Flows 13:00 Sep - - -$70.50b -  
  11/19 Housing Starts 05:30 Oct 1320k - 1256k -  
  11/19 Housing Starts MoM 05:30 Oct 5.10%   -9.40%    
  11/19 Building Permits 05:30 Oct 1383k - 1387k 1391k  
  11/19 Building Permits MoM 05:30 Oct -0.60%   -2.70% -2.40%  
  11/20 MBA Mortgage Applications 04:00 15 Nov - - 9.60% -  
  11/21 Philadelphia Fed Business Outlook 05:30 Nov 6.00 - 5.60 -  
  11/21 Initial Jobless Claims 05:30 16 Nov 218k - 225k -  
  11/21 Continuing Claims 05:30 9 Nov 1683k - 1683k -  
  11/21 Bloomberg Consumer Comfort 06:45 17 Nov - - 58.00 -  
  11/21 Leading Index 07:00 Oct -0.20% - -0.10% -  
  11/21 Existing Home Sales 07:00 Oct 5.49m - 5.38m -  
  11/21 Existing Home Sales MoM 07:00 Oct 2.00% - -2.20% -  
  11/22 Markit US Manufacturing PMI 06:45 Nov P 51.40 - 51.30 -  
  11/22 Markit US Services PMI 06:45 Nov P 51.10 - 50.60 51.00  
  11/22 Markit US Composite PMI 06:45 Nov P - - 50.90 -  
  11/22 U. of Mich. Sentiment 07:00 Nov F 95.70 - 95.70 -  
  11/22 Kansas City Fed Manf. Activity 08:00 Nov -2.00 - -3.00 -
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