Today’s Market Update

Treasuries Gain Before Powell and CPI, Led by Long-End of Curve
2019-11-13 12:21:47.806 GMT

By Edward Bolingbroke
(Bloomberg) — Treasuries aggressively bull flatten with
long-end yields lower by around 7bp and outperforming following
Tuesday’s late pricing of AbbVie investment-grade corporate bond
deal; front-end of the curve underperforms amid delta hedging of
large downside eurodollar option flow. Treasuries outperform
core European rates ahead of consumer price inflation data at
8:30am ET and Federal Reserve Chairman Jerome Powell’s
Congressional appearance at 11am.
* Yields lower by 3bp to 7bp across the curve with 2s10s flatter
by ~3bp and 5s30s a little more than 1bp narrower; 10-year
yields at 1.875%, richer by 6bp and on lowest levels of the week
** Bunds cheaper by 2.5bp vs. Treasuries, gilts wider by 1bp
while Italian bonds notably lag rest of European rates after
poor auction demand
* Focus on Fed’s Powell who is scheduled to address the Joint
Economic Committee of Congress at 11am ET
** “The possibility of a communications error makes the event
noteworthy,” BMO strategists say in a note
* Asia session options flow included EDU0 98.00/98.75 risk
reversal which traded a total 80k via blocks paying 4.5 ticks
for the puts
* Dollar IG issuance slate includes Kommuninvest $1b long 3-year
and Egypt also possibly pricing bonds ranging from 4 years to 40 years
* 3-month dollar Libor +0.063bp at 1.90988%
* U.S. economic data calendar includes October CPI (8:30am) and
monthly budget statement (2pm); PPI, Empire manufacturing,
retail sales and industrial production ahead this week
* In addition to Powell, Fed speakers include Kashkari (1:30pm)
and Harker (7:30pm); Quarles, Clarida, Evans, Daly, Williams,
Bullard and Kaplan also due this week

To contact the reporter on this story:
Edward Bolingbroke in New York at ebolingbrok1@bloomberg.net
To contact the editor responsible for this story:
Benjamin Purvis at bpurvis@bloomberg.net

 

Treasury Yields

Term  Current  Last Month
3 Month1.572%1.661%
6 Month1.573%1.655%
2 Year1.634%1.591%
5 Year1.685%1.554%
10 Year1.877%1.729%
30 Year2.356%2.194%
Yields updated each morning.
Source: Bloomberg

Benchmarks

PRIME4.75%
DJIA27,691.49
Crude Oil (WTI)$56.54
YEN108.8385
Gold$1,462.28
1 Year CMT1.56%
1 Month LIBOR1.7633%
Fed Funds Effective1.54%
Next FOMC MeetingDecember 10th-11th
Source: Bloomberg

Economic Indicator Calendar

DateEventPeriodSurv (M)ActualPriorRevised
11/12NFIB Small Business OptimismOct102.0102.4101.8
11/13MBA Mortgage Applications8-Nov9.6%-0.1%
CPI MoMOct0.3%0.4%0.0%
CPI Ex Food and Energy MoMOct0.2%0.2%0.1%
CPI YoYOct1.7%1.8%1.7%
CPI Ex Food and Energy YoYOct2.4%2.3%2.4%
CPI Core Index SAOct265.074265.011264.595
CPI Index NSAOct257.200257.346256.759
Real Avg Weekly Earnings YoYOct0.9%0.9%1.0%
Real Avg Hourly Earning YoYOct1.2%1.2%1.3%
Monthly Budget StatementOct-$129.1b$82.8b
11/14PPI Final Demand MoMOct0.3%-0.3%
PPI Ex Food and Energy MoMOct0.2%-0.3%
PPI Ex Food, Energy, Trade MoMOct0.2%0.0%
PPI Final Demand YoYOct0.9%1.4%
PPI Ex Food and Energy YoYOct1.5%2.0%
PPI Ex Food, Energy, Trade YoYOct1.7%
Initial Jobless Claims9-Nov215k211k
Continuing Claims2-Nov1685k1689k
Bloomberg Consumer Comfort10-Nov59.1
Mortgage Delinquencies3Q4.53%
MBA Mortgage Foreclosures3Q0.9%
11/15Empire ManufacturingNov6.04.0
Import Price Index MoMOct-0.2%0.2%
Import Price Index ex Petroleum MoMOct-0.1%-0.1%
Import Price Index YoYOct-2.3%-1.6%
Export Price Index MoMOct-0.1%-0.2%
Export Price Index YoYOct-1.6%
Retail Sales Advance MoMOct0.2%-0.3%
Retail Sales Ex Auto MoMOct0.4%-0.1%
Retail Sales Ex Auto and GasOct0.3%0.0%
Retail Sales Control GroupOct0.3%0.0%
Industrial Production MoMOct-0.4%-0.4%
Manufacturing (SIC) ProductionOct-0.7%-0.5%
Capacity UtilizationOct77.0%77.5%
Business InventoriesSep0.1%0.0%
Source: Bloomberg