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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   100-13.5 (-04)  
  FN 3.5% Coupon   97-18.5 (00)  
  Support   3.237%  
  Resistance   3.039%  
Wednesday, November 21, 2018
Treasuries are slightly lower across the curve this morning from yesterday's close. The UST 10-Year yield is currently at 3.075% after closing at 3.064% prior.

Treasury yields rose overnight before slipping back from highs amid speculation that the Fed is considering a halt to its gradual monetary tightening path, and possibly ending its cycle of rate hikes as early as spring of 2019; the dollar fell on the news. Elsewhere, U.S. stock futures trimmed some of yesterday's sharp declines and gained with European equities on optimism pertaining to Italy's budget crisis as the Italian government will reportedly be open to budget revisions. Oil also bounced back from a one year low after sliding below $54.00 a barrel yesterday, and saw West Texas Intermediate crude climb 2.40 percent for its largest increase in over seven weeks. Treasuries moved higher early in today's session after U.S. data showed that Durable Goods Orders declined in October, falling 4.40% following a downwardly revised 0.10% drop prior. Excluding transportation, Durables gained 0.10% after a slipping 0.60% revised prior; Capital Goods Orders nondefense excluding aircraft was unchanged at 0.00%.

MBA Mortgage Applications fell for a fourth consecutive week after dropping 0.10% in activities for the week ended November 16. Purchase applications saw a 3.10% increase after falling 2.30% the week prior, while refinancing activities fell 5.00% after declining 4.30% the week prior. We also received the Initial Jobless Claims for the week ended November 17 which showed the filings for unemployment benefits rose 3k to 224k from an upwardly revised 221k the week prior; Continuing Claims for the week ended November 10 fell 2k to 1668k from a downwardly revised 1670k the week prior. The calendar also featured the Leading Index for October which rose as expected at 0.10% following an upwardly revised 0.60% gain prior. Moreover, the October Existing Home Sales rose 1.40% MoM to a 5.22 Million unit rate following a decline of 3.40% to 5.15 Million unit rate in September. Lastly, the final reading of the November University of Michigan Sentiment fell to 97.50 from 98.30 prior.

The curve has bear-flattened with the UST 10-Year yield up 1.1 bps from prior closing.
This Week's Events
  11/19 NAHB Housing Market Index 07:00 Nov 67.00 60.00 68.00 -  
  11/20 Housing Starts 05:30 Oct 1228k 1228k 1201k 1210k  
  11/20 Housing Starts MoM 05:30 Oct 2.20% 1.50% -5.30% -5.50%  
  11/20 Building Permits 05:30 Oct 1260k 1263k 1241k 1270k  
  11/20 Building Permits MoM 05:30 Oct -0.80% -0.60% -0.60% 1.70%  
  11/21 MBA Mortgage Applications 04:00 16 Nov - -0.10% -3.20% -  
  11/21 Durable Goods Orders 05:30 Oct P -2.60% -4.40% 0.70% -0.10%  
  11/21 Durables Ex Transportation 05:30 Oct P 0.40% 0.10% 0.00% -0.60%  
  11/21 Initial Jobless Claims 05:30 17 Nov 215k 224k 216k 221k  
  11/21 Continuing Claims 05:30 10 Nov 1653k 1668k 1676k 1670k  
  11/21 Bloomberg Consumer Comfort 06:45 18 Nov - 61.30 60.50 -  
  11/21 Leading Index 07:00 Oct 0.10% 0.10% 0.50% 0.60%  
  11/21 U. of Mich. Sentiment 07:00 Nov F 98.30 97.50 98.30 -  
  11/21 Existing Home Sales 07:00 Oct 5.20m 5.22m 5.15m -  
  11/21 Existing Home Sales MoM 07:00 Oct 1.00% 1.40% -3.40% -  
  11/22 No Data - - - - - -  
  11/23 Markit US Manufacturing PMI 06:45 Nov P 55.70 - 55.70 -  
  11/23 Markit US Services PMI 06:45 Nov P 55.00 - 54.80 -  
  11/23 Markit US Composite PMI 06:45 Nov P - - 54.90 -  
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