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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   97-26 (-08.5)  
  FN 2.5% Coupon   105-01.5 (-01)  
  Support   0.872%  
  Resistance   0.647%  
  Friday, January 8, 2021

Treasury Yields Rise as Payrolls Underwhelm

Market opened today's session with treasuries lower across all maturities. 10-Year Treasury yield is at 1.1017, 2.22 bps increased from prior closing of 1.0795.
US Stocks opened higher this morning as companies in energy, retail, and technology rallied. With Democrats taking the senate this week, thanks to victories in Georgia's elections, markets are betting on more fiscal aid to be pushed through Joe Biden's administration once he takes office on January 20. Elsewhere, Bitcoin approached $42,000 while Brent crude neared $55 a barrel following Saudi Arabia's planned output cut. WTI crude increased by 1.4% while Gold lowered by 1.9%. On the economic front, Change in Nonfarm Payrolls significantly underperformed expectations after decreasing by 140K for the month of December. The first decline since April, today's figure showed declines were mostly seen within the leisure and hospitality sector, with the sector itself losing 98K jobs in December. The Unemployment Rate was little changed, reporting at 6.70% for the month of December. While the pandemic continues to lay a toll on in-person reliant industries such as restaurants and hotels, potential upside remains on stimulus rollout which could help stimulate economic activity, at least in the short run. Reporting next week on Thursday are Initial Jobless Claims with expectations set at 785K.
The curve has bear-steepened with UST 10-Year yield up 2.22 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% 0.80% 0.30% -  
  01/08 Average Hourly Earnings YoY 05:30 Dec 4.50% 5.10% 4.40% -  
  01/08 Change in Nonfarm Payrolls 05:30 Dec 50k -140k 245k 336k
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