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Market Commentary


 
Today's Coupons
 
  10-Year Notes   103-01 (+05)  
 
  FN 3.5% Coupon   102-13.5 (+01)  
 
  Support   3.237%  
 
  Resistance   1.939%  
 
 
 
 
Monday, July 22, 2019
 
 
Treasury Yields Lower as Investors Price in a Quarter Point Rate Cut
 
 
Market opened today’s session with treasuries advancing across all maturities. 10-Year Treasury yield is at 2.0325, 2.27 bps decreased from prior closing of 2.0552.

US stock futures opened with modest gains as investors looked ahead of a big week for corporate earnings. Treasuries also rallied as investors scaled back bets for an aggressive policy easing from the Fed. St. Louis Fed President Bullard, a 2019 voter and one of the most dovish policy makers, said in an interview on Friday that he would like to go for a quarter percentage point rate cut at the upcoming meeting. He added that this cut would be a recalibration rather than a start of multiple cuts. Investors are now fully pricing a quarter point rate cut at the July meeting. Meanwhile, as the corporate earnings season continues, more than a quarter of the S&P 500 companies will be reporting their results this week including Facebook, Alphabet, Amazon, McDonald’s, and Boeing. More than 15% of S&P 500 companies have reported their second quarter results so far and about 78.5% of those companies came in above analysts’ expectations while 67% of those companies reported better-than-expected quarterly revenues. Elsewhere, WTI crude added to its gains from Friday, trading above $55 a barrel this morning as tensions in the Persian Gulf remained elevated after Iran seized a British tanker.

We have a very light economic calendar today. Chicago Fed National Activity Index in June came in below expectation of 0.08 at -0.02, following an upwardly revised reading of -0.03 in May. Later today, the US Treasury is scheduled to auction off $36 billion of 3-month bills and $36 billion of 6-month bills at 8:30 AM (PT).

The curve has bull-flattened with UST 10-Year yield down 2.27 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  07/22 Chicago Fed Nat Activity Index 05:30 Jun 0.08 -0.02 -0.05 -0.03  
                   
  07/23 FHFA House Price Index MoM 06:00 May 0.40% - 0.40% -  
                   
  07/23 Richmond Fed Manufact. Index 07:00 Jul 5.00 - 3.00 -  
                   
  07/23 Existing Home Sales 07:00 Jun 5.33m - 5.34m -  
                   
  07/23 Existing Home Sales MoM 07:00 Jun -0.30% - 2.50% -  
                   
  07/24 MBA Mortgage Applications 04:00 19 Jul - - -1.10% -  
                   
  07/24 Markit US Manufacturing PMI 06:45 Jul P 50.90 - 50.60 -  
                   
  07/24 Markit US Services PMI 06:45 Jul P 51.80 - 51.50 -  
                   
  07/24 Markit US Composite PMI 06:45 Jul - - 51.50 -  
                   
  07/24 New Home Sales 07:00 Jun 660k - 626k -  
                   
  07/24 New Home Sales MoM 07:00 Jun 5.40% - -7.80% -  
                   
  07/25 Durable Goods Orders 05:30 Jun P -0.70% - -1.30% -  
                   
  07/25 Durables Ex Transportation 05:30 Jun P 0.20% - 0.40% -  
                   
  07/25 Initial Jobless Claims 05:30 20 Jul 218k - 216k -  
                   
  07/25 Continuing Claims 05:30 13 Jul 1691k - 1686k -  
                   
  07/25 Wholesale Inventories MoM 05:30 Jun P 0.50% - 0.40% -  
                   
  07/25 Bloomberg Consumer Comfort 06:45 21 Jul - - 64.70 -  
                   
  07/25 Kansas City Fed ManfActivity 08:00 Jul 3.00 - 0.00 -  
                   
  07/26 GDP Annualized QoQ 05:30 2Q A 1.80% - 3.10% -  
                   
  07/26 Personal Consumption 05:30 2Q A 4.00% - 0.90% -  
                   
  07/26 GDP Price Index 05:30 2Q A 2.00% - 0.90% -  
                   
  07/26 Core PCE QoQ 05:30 2Q A 2.00% - 1.20% -
                   
 
 
 
 
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