|10-Year: -8/32....2.661%.... GNMAs: .... USD/JPY: 110.39.... EUR/USD: 1.1277|
-- Optimism surrounding the start of the latest round of trade negotiations between officials from United States and China
-- Dollar Index nears January high
Treasuries Slip While Greenback Remains Bid
- U.S. Treasuries began the week on a lower note, which returned 5s and 10s to their starting levels from Thursday. Treasuries started the cash session on the defensive after overnight trade saw the reopening of markets on China's Mainland. A U.S. trade delegation arrived in Beijing for this week's trade talks, which was viewed with optimism. Treasuries reclaimed a portion of their opening losses during morning trade, but resistance was found near the day's opening levels. The 10-yr note and shorter tenors dipped beneath their opening lows in midday trade while the long bond continued trading inside its morning range until the close. The U.S. Dollar Index built on last week's rally, rising 0.5% to 97.07. The Index recorded its eighth consecutive advance thanks to greenback's broad-based strength, which has the Index trading within 1.0% of its high from 2018.
- Yield Check:
- 2-yr: +2 bps to 2.48%
- 3-yr: +2 bps to 2.46%
- 5-yr: +3 bps to 2.48%
- 10-yr: +3 bps to 2.66%
- 30-yr: +2 bps to 3.00%
- China Daily reported that China's GDP growth is expected to slow to 6.3% in 2019 from last year's 6.6%.
- Xinhua reported that sales during the Lunar New Year grew 42.7% year-over-year.
- Bloomberg reported that China Minsheng Investment Group and Wintime Energy missed payment deadlines, suggesting corporate liquidity remains an issue.
- There was speculation that Spain's Prime Minister Pedro Sanchez could call an early election that would take place on April 14.
- UK's December GDP decreased 0.4% month-over-month (expected 0.0%; last 0.2%). Q4 GDP increased 0.2% quarter-over-quarter (expected 0.3%; last 0.6%) and grew 1.3% year-over-year (expected 1.4%; last 1.6%). December Construction Output decreased 2.8% month-over-month (expected 0.2%; last 0.1%). December Industrial Production fell 0.5% month-over-month (expected 0.1%; last -0.3%) and declined 0.9% year-over-year (expected -0.4%; last -1.3%). December Manufacturing Production fell 0.7% month-over-month (expected 0.2%; last -0.1%) while the year-over-year reading decreased 2.1% (expected -1.1%; last -1.2%).
- WTI crude: -0.7% to $52.39/bbl
- Gold: -0.2% to $1311.85/ozt
- Copper: -0.7% to $2.79/lb
- EUR/USD: -0.4% to 1.1277
- GBP/USD: -0.7% to 1.2863
- USD/CNH: +0.3% to 6.7999
- USD/JPY: +0.6% to 110.39
- The Day Ahead:
- 6:00 ET: January NFIB Small Business Optimism Index (prior 104.4)
- 10:00 ET: December Job Openings and Labor Turnover Survey (prior 6.888 mln)
- Fed Speakers:
- 12:45 ET: Chairman Jay Powell