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Market Commentary


 
 
Today's Coupons
 
  10-Year Notes   100-31.5 (-10.5)  
 
  FN 3.5% Coupon   103-04.5 (00)  
 
  Support   2.753%  
 
  Resistance   1.574%  
 
 
 
 
  Tuesday, January 28, 2020
 
 

Treasury Yields Slightly Rise as Stocks Rebound

 
 
Market opened today’s session with treasuries edging lower across all maturities. 10-Year Treasury yield is at 1.6338, 2.58 bps increased from prior closing of 1.6080.

US stock index futures advanced after the biggest sell-off in more than three months on Monday as investors grappled with earnings reports and potential impact of the deadly virus. Apple Inc. rose in the premarket after reportedly asking its suppliers to increase output by 10% in the first half of this year for iPhones. Pfizer and 3M posted disappointing earnings and Harley-Davidson reported weak revenue figures, sending shares of all three companies south in the premarket. 67% of the S&P 500 companies which have reported their results so far have beaten analysts’ estimates. Meanwhile, the death toll due to the coronavirus in China climbed to 106 with 4,515 confirmed cases in China alone. China has announced it will stop individual travelers to Hong Kong and close some border checkpoints in order to contain the virus from spreading. Despite the international containment efforts, fears over the virus disrupting global economy continue to be growing. Elsewhere, WTI crude drifted this morning, trading slightly above $53 a barrel.

The headline Durable Goods Orders jumped to 2.40% from a downwardly revised prior of -3.10% vs. 0.30% consensus. However, the core came in below its consensus of 0.30% at -0.10% as the details of the data showed weakness outside of defense aircraft orders. The November Case-Shiller 20-city Home Composite Price index rose 0.48% MoM and 2.55% YoY with both readings printing above expectations of 0.40% and 2.40%, respectively. Lastly, Conference Board Consumer Confidence index in January inched higher to 131.60 from an upwardly revised prior of 128.20 vs. 128.00 consensus, and Richmond Fed Manufacturing index in January also surged to 20.00 from -5.00 prior vs. -3.00 consensus. Later today, the US Treasury is scheduled to auction off $26 billion of 52-week bills and $20 billion of 2-year FRNs at 8:30 AM (PT), and $32 billion 7-year notes at 10:00 AM (PT). Today, the Fed will kick off their two-day FOMC meeting with their rate decision scheduled to be released at 11:00 AM (PT) tomorrow, followed by a press conference with Fed Chair Powell at 11:30 AM (PT).

The curve has bear-steepened with UST 10-Year yield up 2.58 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  01/27 Dallas Fed ManfActivity 07:30 Jan -2.00 -0.20 -3.20 -  
                   
  01/28 Durable Goods Orders 05:30 Dec P 0.30% 2.40% -2.10% -3.10%  
                   
  01/28 Durables Ex Transportation 05:30 Dec P 0.30% -0.10% -0.10% -0.40%  
                   
  01/28 S&P CoreLogic CS 20-City MoM SA 06:00 Nov 0.40% 0.48% 0.43% 0.46%  
                   
  01/28 S&P CoreLogic CS 20-City YoY NSA 06:00 Nov 2.40% 2.55% 2.23% 2.22%  
                   
  01/28 Richmond Fed Manufact. Index 07:00 Jan -3.00 20.00 -5.00 -  
                   
  01/29 MBA Mortgage Applications 04:00 24 Jan - - -1.20% -  
                   
  01/29 Wholesale Inventories MoM 05:30 Dec P 0.10% - -0.10% -  
                   
  01/29 Pending Home Sales MoM 07:00 Dec 0.50% - 1.20% -  
                   
  01/29 Pending Home Sales NSA YoY 07:00 Dec 10.30% - 5.60% -  
                   
  01/29 FOMC Rate Decision (Upper Bound) 11:00 29 Jan 1.75% - 1.75% -  
                   
  01/29 FOMC Rate Decision (Lower Bound) 11:00 29 Jan 1.50% - 1.50% -  
                   
  01/30 Personal Consumption 05:30 4Q A 2.00% - 3.20% -  
                   
  01/30 Initial Jobless Claims 05:30 25 Jan 215k - 211k -  
                   
  01/30 Continuing Claims 05:30 18 Jan 1738k - 1731k -  
                   
  01/31 Personal Income 05:30 Dec 0.30% - 0.50% -  
                   
  01/31 Personal Spending 05:30 Dec 0.30% - 0.40% -  
                   
  01/31 PCE Deflator MoM 05:30 Dec 0.20% - 0.20% -  
                   
  01/31 PCE Deflator YoY 05:30 Dec 1.60% - 1.50% -  
                   
  01/31 U. of Mich. Sentiment 07:00 Jan F 99.10 - 99.10 -
                   
 
 
 
 
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