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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   98-00 (+11.5)  
  FN 2.5% Coupon   105-00.5 (+04.5)  
  Support   0.902%  
  Resistance   0.658%  
  Friday, January 15, 2021

Treasury Yields Fall Following as Retail Sales Underwhelm

Market opened today's session with treasuries higher across all maturities. 10-year Treasury yield is at 1.1005, 2.87 bps decreased from prior closing of 1.1292.

US stocks opened lower this morning following the release of President Elect Joe Biden's $1.9 trillion stimulus plan. Biden's proposal, dubbed "American Rescue Plan," faced early opposition from Republican lawmakers, with the plan focusing on increased jobless benefits, direct payments to households, and expanded vaccination and virus testing programs. Notable early movers include JPMorgan Chase & Co., Citigroup Inc., and Wells Fargo & Co., all of which saw shares decline following Q4 earnings announcements. Elsewhere, WTI crude advanced by 1.5% to $52.82 a barrel, meanwhile Gold lowered by 0.2% to $1,843.10 an ounce. On the economic front, PPI Final Demand reported slightly lower than expected at an increase of 0.30%. December's increase was driven by an increase in energy, with the cost of goods sold rising 1.10% thanks to an increase in gasoline prices. Retail Sales for the month of December declined by 0.70%, failing to meet expectations of 0.00%. Once again attributable to the virus gaining steam during the months of November and December, weak sales reflect reduced consumer spending which can best be restored through increased vaccinations and a return of travel and leisure activities. Elsewhere, Industrial Production for the month of December significantly beat expectations after reporting an increase of 1.60%. Notably Factory Production and Capacity Utilization both noted increases over expectations, reporting at 0.90% and 74.50%, respectively.

The curve has bull-flattened with UST 10-Year yield down 2.87 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% 0.30% 0.10% -  
  01/15 PPI Final Demand YoY 05:30 Dec 0.80% 0.80% 0.80% -  
  01/15 U. of Mich. Sentiment 07:00 Jan P 79.50 79.20 80.70 -
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