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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   98-03.5 (-11.5)  
  FN 2.5% Coupon   105-03.5 (-03)  
  Support   0.862%  
  Resistance   0.642%  
  Thursday, January 7, 2021

Treasury Yields Rise as Democrats Take Senate

Market opened today's session with treasuries lower across all maturities. 10-Year Treasury yield is at 1.0778, 4.23 bps increased from prior closing of 1.0355.
US stocks opened higher this morning following a break-out of violence at capitol hill a day earlier. Technology and financial sectors rallied early this morning, with tech-heavy Nasdaq noting increases as Facebook Inc. and Alphabet Inc. both rose by 1.6%. President-elect Joe Biden was formally recognized by congress as the next president of the United States yesterday, following a storming of the US capitol by pro-Trump supporters. Democrats will be entering the new year with control of the Senate, House and presidency, with Biden vowing to send out $2,000 stimulus checks as part of his agenda. Elsewhere, Bitcoin surpassed $38,000, meanwhile WTI crude increased by 0.1% and Gold remained at $1,918.99 an ounce. On the economic front, Initial Jobless Claims for the week closing January 2nd came in slightly below expectations, reporting at 787K. Headwinds remain with surging infections and increased lockdowns, however with Democrats taking the senate, more fiscal aid can be expected to cushion any short term downturns from the pandemic. The US Trade Balance reported lower than expected, decreasing by about five billion dollars from a month prior towards -$68.10bb in November. Notably, total imports increased by 2.90% while surplus in services reached $18.20bb, the lowest point since August 2012. Reporting tomorrow are Change in Nonfarm Payrolls and Unemployment Rate, both expected at 50K and 6.80%, respectively.
The curve has bear-steepened with UST 10-Year yield up 4.23 bps.
This Week's Events
  01/04 Markit US Manufacturing PMI 06:45 Dec F 56.30 57.10 56.50 -  
  01/04 Construction Spending MoM 07:00 Nov 1.00% 0.90% 1.30% 1.60%  
  01/05 ISM Prices Paid 07:00 Dec 66.00 77.60 65.40 -  
  01/06 MBA Mortgage Applications 04:00 1 Jan - 1.70% -5.80% -  
  01/06 ADP Employment Change 05:15 Dec 75k -123k 307k 304k  
  01/06 Markit US Services PMI 06:45 Dec F 55.20 54.80 55.30 -  
  01/06 Markit US Composite PMI 06:45 Dec F - 55.30 55.70 -  
  01/06 Factory Orders 07:00 Nov 0.70% 1.00% 1.00% 1.30%  
  01/06 Durable Goods Orders 07:00 Nov F 0.90% 1.00% 0.90% -  
  01/06 Durables Ex Transportation 07:00 Nov F 0.40% 0.40% 0.40% -  
  01/07 Initial Jobless Claims 05:30 2 Jan 800k 787k 787k 790k  
  01/07 Continuing Claims 05:30 26 Dec 5200k 5072k 5219k 5198k  
  01/07 Bloomberg Consumer Comfort 06:45 3 Jan - 44.40 44.60 -  
  01/08 Average Hourly Earnings MoM 05:30 Dec 0.20% - 0.30% -  
  01/08 Average Hourly Earnings YoY 05:30 Dec 4.50% - 4.40% -  
  01/08 Change in Nonfarm Payrolls 05:30 Dec 50k - 245k -
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