Updated: 10-27-2014

Closing Bond Summary/Week Ahead
Updated: 24-Oct-14  03:42PM ET
Analyst: Pat O'Hare

  • At the cash close, yields across the Treasury curve were unchanged
    • 2-yr note yield 0.39%
    • 5-yr note yield 1.49%
    • 10-yr note yield 2.27%
    • 30-yr bond yield 3.04%
  • Yields had been lower earlier in the session, bolstered by pre-open reports indicating new home prices in China declined 1.3% year-over-year and that a doctor in New York City tested positive for Ebola after returning from aid work in Guinea
  • A weaker than expected New Home Sales report in the U.S. also lent the market some early support
    • September new home sales increased 0.2% to 467,000 (Briefing.com consensus 475,00) from a downwardly revised 466,000 in August (from 504,000)
    • New home prices declined 4.0% year-over-year to $259,000 -- the first decline since April and the largest decline since a 7.7% drop in January 2012
  • Early buying interest faded, however, as stocks found their footing and gained momentum on a headline from the NIH confirming Dallas nurse Nina Pham is free of the Ebola virus
  • During a bout of selling, the 10-yr note would not break out above 2.300% resistance
  • The 2-yr note tested resistance in the 0.40% area, but renewed buying interest knocked it back below levels that were last seen in early June
  • The U.S Dollar Index was down 0.2% to 85.71 as the greenback lost some modest ground against the yen and the euro
  • Modest strength in the euro belied concerns about the bank stress test results that will be released by the ECB on Sunday
    • Press reports, citing people familiar with the matter, suggested that as many as 25 banks will fail the stress test
  • Commodities were mixed
    • Oil -1.1% to $81.21/bbl
    • Gold +0.1% to $1230.40/troy ounce
    • Copper unch at $3.04/lb
The Week Ahead
  • Monday's data is limited to pending home sales (10).  Attention will also be paid to the results of the ECB bank stress test and the Brazilian election.
  • Tuesday will see durable orders (8:30), Case-Shiller 20-city Index (9), and consumer confidence (10). Treasury will auction $29 bln 2Y notes. 
  • Wednesday will see just the weekly MBA Mortgage Index (7). The FOMC will announce its latest policy decisions (14). Treasury will hold a $35 bln 5Y note auction. 
  • Thursday's data includes initial and continuing claims and GDP-Adv. (8:30). Treasury will auction $29 bln 7Y notes. 
  • Friday's data is heavy as personal income and spending, PCE Prices -- Core, Employment Cost Index (8:30), Chicago PMI (9:45), and Michigan Sentiment -- Final (9:55) are all due out.

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