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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-28 (-05)  
  FN 3.5% Coupon   102-21.5 (00)  
  Support   3.063%  
  Resistance   1.668%  
  Thursday, November 21, 2019

Treasury Yields Nudge Higher on Trade Developments

Market opened today’s session with treasuries inching lower across all maturities. 10-Year Treasury yield is at 1.7706, 2.57 bps increased from prior closing of 1.7449.

US stocks pointed to a higher open this morning as the US may reportedly delay the tariffs scheduled for December 15th if a deal is not reached by then. Treasuries turned slightly lower on the news. It has been a very rocky road on the trade front in the past couple weeks as both countries juggled between being optimistic and dissenting. This morning, trade worries still remain as the Congressional bill supporting Hong Kong protestors is expected to be signed by President Trump which may potentially cause further conflicts reaching the phase-one trade deal. China has threatened to retaliate if the US were to pass the bill. On the other hand, it was reported that U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin were invited to visit Beijing to sit down for further negotiations. The dollar drifted down against its major peers and WTI crude edged slightly higher this morning.

Despite the headline advance of the November Philadelphia Fed Manufacturing Survey from 5.60 prior to 10.40 reading, details displayed slight weakness in employment and capital expenditure plans. Both initial Jobless Claims and Continuing Claims remained fairly stable, printing 227k and 1695k vs revised prior readings of 227k and 1692k, respectively. Leading Index in October came in line with consensus of -0.10% and Existing Home Sales increased from revised prior of 5.36 million to 5.46 million vs consensus of 5.49 million. Later today, the US Treasury is scheduled to auction off $50 billion of 4-week bills and $40 billion of 8-week bills at 8:30 AM PT, and 10-Year TIPS reopening at 10 AM PT.

The curve has bear-steepened with UST 10-Year yield up 2.57 bps.
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 - $49.50b -$41.10b -$41.20b  
  11/18 Total Net TIC Flows 13:00 Sep - -$37.60b $70.50b $41.90b  
  11/19 Housing Starts 05:30 Oct 1320k 1314k 1256k 1266k  
  11/19 Housing Starts MoM 05:30 Oct 5.10% 3.80% -9.40% -7.90%  
  11/19 Building Permits 05:30 Oct 1385k 1461k 1387k 1391k  
  11/19 Building Permits MoM 05:30 Oct -0.40% 5.00% -2.70% -2.40%  
  11/20 MBA Mortgage Applications 04:00 15 Nov - -2.20% 9.60% -  
  11/21 Philadelphia Fed Business Outlook 05:30 Nov 6.00 10.40 5.60 -  
  11/21 Initial Jobless Claims 05:30 16 Nov 218k 227k 225k 227k  
  11/21 Continuing Claims 05:30 9 Nov 1683k 1695k 1683k 1692k  
  11/21 Bloomberg Consumer Comfort 06:45 17 Nov - 59.10 58.00 -  
  11/21 Leading Index 07:00 Oct -0.10% -0.10% -0.10% -0.20%  
  11/21 Existing Home Sales 07:00 Oct 5.49m 5.46m 5.38m 5.36m  
  11/21 Existing Home Sales MoM 07:00 Oct 2.00% 1.90% -2.20% -2.50%  
  11/22 Markit US Manufacturing PMI 06:45 Nov P 51.40 - 51.30 -  
  11/22 Markit US Services PMI 06:45 Nov P 51.00 - 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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