Updated: 03-19-2019

The Market at 07:57AM ET
10-Year: +1/32…2.604…
EUR/USD: 1.1352…
USD/JPY: 111.27…

Moving the Market

-- FOMC begins two-day policy meeting: no rate hike expected tomorrow

-- 10:00 ET: January Factory Orders (Briefing.com consensus 0.2%; prior 0.1%)

07:57AM ET

Set for Quiet Start

  • U.S. Treasuries are on track for a flat start after another quiet night. Treasury futures saw very limited movement in overnight trade, but they approached yesterday's intraday highs in early-morning action, where they found resistance. The past two hours have seen some very light selling, which has pressured the complex back to yesterday's closing levels. The long bond has shown some slight relative weakness after outperforming during Monday's affair. The FOMC will begin its two-day policy meeting today. There are no expectations for the central bank to announce a rate hike tomorrow, but the market will be eager to hear an update on the Fed's plan to stop the balance sheet runoff. The U.S. Dollar Index is down 0.2% at 96.37, revisiting its 50-day moving average.
  • Yield Check:
    • 2-yr: UNCH at 2.45%
    • 3-yr: UNCH at 2.40%
    • 5-yr: UNCH at 2.41%
    • 10-yr: UNCH at 2.60%
    • 30-yr: +1 bp to 3.02%
  • News:
    • The Reserve Bank of Australia released its latest policy meeting minutes, noting that there are significant uncertainties in the economic outlook. The central bank said it sees a risk of a "marked slowing" in dwelling investment in the near term.
    • Australia's Q4 House Price Index fell 2.4% quarter-over-quarter (expected -1.9%; last -1.5%), representing the sharpest contraction in the series that dates back to 2008.
    • The Sun reported that British Prime Minister Theresa May will seek a 9-12 month Brexit extension from the EU after Speaker of the House of Commons John Bercow indicated that he will not allow a third vote on the same withdrawal bill.
    • German Chancellor Angela Merkel said she will "fight to last hour" for an orderly Brexit. Ms. Merkel also commented briefly on the potential Deutsche Bank-Commerzbank merger, saying the decision should be left up to the banks and that the government should not stand in the way of a deal.
  • Commodities:
    • WTI Crude: +0.6% to $59.47/bbl
    • Gold: +0.5% to $1308.20/ozt
    • Copper: +1.1% to $2.94/lb
  • Currencies:
    • EUR/USD: +0.2% to 1.1352
    • GBP/USD: +0.3% to 1.3280
    • USD/CNH: -0.1% to 6.7153
    • USD/JPY: -0.2% to 111.27
  • Data out Today:
    • 10:00 ET: January Factory Orders (Briefing.com consensus 0.2%; prior 0.1%)

10-Yr: +1/32… EUR/USD: 1.1352… USD/JPY: 111.27…

03:08PM ET

Long Bond Outperforms in Quiet Monday Trade

  • U.S. Treasuries began the week on a mixed, but largely unchanged note. Treasury futures saw limited movement in overnight trade, but light selling in early-morning action put the cash market on track for a modestly lower start. However, the long bond rebounded swiftly after the cash open and climbed toward its session high from Friday as the day wore on. Shorter tenors also climbed off their opening lows in early trade, but they couldn't make a sustained move into the green. The 10-yr note slipped back to its starting level in late action while the 5-yr note settled just beneath its morning low. The U.S. Dollar Index dipped toward its 50-day moving average (96.35) in overnight action, but stopped just short of that level (96.38), and recovered to end the day little changed at 96.55.
  • Yield Check:
    • 2-yr: +1 bp to 2.45%
    • 3-yr: +1 bp to 2.40%
    • 5-yr: +1 bp to 2.41%
    • 10-yr: +1 bp to 2.60%
    • 30-yr: -1 bp to 3.01%
  • News:
    • British Prime Minister Theresa May has been warned by Speaker of the House of Commons John Bercow that he will not allow a third vote on the Brexit deal unless the proposal is substantially different from the previous versions. This comes after Prime Minister May warned MPs that a failure to support her deal would lead her to seek a lengthy extension from the European Union.
    • South China Morning Post reported that the meeting between President Trump and President Xi may not happen until June. China's President Xi may travel to North Korea in April.
    • Japan's February trade surplus totaled JPY120 billion (expected surplus of JPY90 billion; last deficit of JPY290 billion), but imports fell 6.7% year-over-year (expected -5.8%; last -0.8%) while exports decreased 1.2% year-over-year (expected -0.9%; last -8.4%). January Industrial Production decreased 3.4% month-over-month (expected -3.7%; last -3.7%) while Capacity Utilization fell 4.7% month-over-month (expected -0.3%; last -1.9%)
    • Commerzbank and Deutsche Bank confirmed that they will discuss a merger.
    • Italy's Foreign Minister Enzo Moavero Milanesi acknowledged that Italy is aware of security concerns associated with the country's plan to participate in China's Belt and Road Initiative.
    • Eurozone January trade surplus totaled EUR1.50 billion (expected deficit of EUR8.00 billion; last surplus of EUR17.00 billion) Today's Data: The NAHB Housing Market Index remained at 62 in March (Briefing.com consensus 63)
  • Commodities:
    • WTI crude: +1.4% to $59.30/bbl
    • Gold: -0.1% to $1302.05/ozt
    • Copper: UNCH at $2.91/lb
  • Currencies:
    • EUR/USD: +0.1% to 1.1336
    • GBP/USD: -0.4% to 1.3251
    • USD/CNH: +0.2% to 6.7176
    • USD/JPY: UNCH at 111.38
  • A Look to Tuesday:
    • 10:00 ET: January Factory Orders (Briefing.com consensus 0.2%; prior 0.1%)

10-Yr: -2/32… EUR/USD: 1.1336… USD/JPY: 111.38…

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