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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   97-30 (-01.5)  
  FN 2.5% Coupon   104-31.5 (+02)  
  Support   0.902%  
  Resistance   0.658%  
  Thursday, January 14, 2021

Treasury Yields Rise Ahead of President Elect Joe Biden's Aid Proposal

Market opened today's session with treasuries lower across all maturities. 10-year Treasury yield is at 1.0968, 1.36 bps increased from prior closing of 1.0832.

US stocks opened higher this morning ahead of President-elect Joe Biden's fiscal aid proposal. Biden's proposal is expected to cost $2 trillion, with direct payments going to American families in addition to state and local funding. On the bureaucratic front, the House of Representatives voted to impeach President Donald Trump, although a trial is not expected to take place in the senate prior to his term-end on January 20th. Later today Fed chief Jerome Powell will discuss the Fed's policy framework, with Federal Reserve Governor Lael Brainard stating the central bank's bond buying program will not be tapered this year. Elsewhere, WTI crude lowered by 0.5% while Silver rose by 1.1% to $25.51 an ounce. On the economic front, Initial Jobless Claims reported greater than expected, with claims for the week ending January 9 amounting to 965K. Additionally, Continuing Claims in state programs amounted to 5.27 million for the week ending January 2nd, a 199,000 claim jump from prior reported values. With virus cases propagating and vaccine distribution still a bit away from reaching a level of critical mass, the first quarter is expected to continue to show weakness in the jobs market. However, today's figure also helps make the case for further stimulus aid, and with initial filings exceeding the worst figures seen in 2007 - 2009, lawmakers may be more open to agreeing to a higher package. Reporting tomorrow are PPI Final Demand, Retail Sales, and Industrial Production, with expectations set at increases of 0.40%, 0.00%, and 0.50%, respectively.

The curve has bear-steepened with UST 10-Year yield up 1.36 bps.

This Week's Events
  01/12 NFIB Small Business Optimism 03:00 Dec 100.20 95.90 101.40 -  
  01/12 JOLTS Job Openings 07:00 Nov 6450 6527 6652 6632  
  01/13 MBA Mortgage Applications 04:00 8 Jan - 16.70% 1.70% -  
  01/13 CPI MoM 05:30 Dec 0.40% 0.40% 0.20% -  
  01/13 CPI YoY 05:30 Dec 1.30% 1.40% 1.20% -  
  01/13 CPI Index NSA 05:30 Dec 260.401 260.474 260.229 -  
  01/13 CPI Core Index SA 05:30 Dec 270.243 270.117 269.887 -  
  01/14 Initial Jobless Claims 05:30 9 Jan 789k 965k 787k 784k  
  01/14 Continuing Claims 05:30 2 Jan 5000k 5271k 5072k -  
  01/14 Bloomberg Consumer Comfort 06:45 10 Jan - 43.20 44.40 -  
  01/15 PPI Final Demand MoM 05:30 Dec 0.40% - 0.10% -  
  01/15 PPI Final Demand YoY 05:30 Dec 0.80% - 0.80% -  
  01/15 U. of Mich. Sentiment 07:00 Jan P 79.80 - 80.70 -
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