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Market Commentary

Market Commentary


Today's Coupons
  10-Year Notes   99-24.5 (+17)  
  FN 3.5% Coupon   103-01 (+01.5)  
  Support   2.759%  
  Resistance   1.721%  
  Tuesday, January 21, 2020

Treasury Yields Lower as Investors Pull Back from Asian Equities

Market opened today’s session with treasuries rallying across all maturities. 10-Year Treasury yield is at 1.7848, 3.67 bps decreased from prior closing of 1.8215.

US stocks fell for the first time after six straight sessions of rallying as investors grappled with concerns over a deadly virus in China. Asian equity markets tumbled overnight, triggered by reports that the respiratory virus has already killed 6 people in China. Investors are staying away from risk assets as they recall the economic fallout from the deadly SARS in 2003 which killed almost 800 people. The broader risk-off mood helped haven assets gain traction this morning with both Treasuries and gold advancing. On the trade front, Treasury Secretary Steven Mnuchin commented that a phase two deal with China might not remove all existing tariff, and President Trump also said he was “absolutely serious” about imposing tariffs on European cars if a deal with the region couldn’t be reached, dampening the optimism recently built around trade. Elsewhere, the Bank of Japan kept their monetary policy unchanged as expected and the IMF downgraded its global economic growth forecast from 3.4% to 3.3% for 2020. WTI crude drifted this morning, trading slightly above $58 a barrel. Also, the earnings season will continue with Netflix, IBM, Proctor & Gamble, and Hyundai among the notable companies posting their results this week. There is no economic data release scheduled for today.

The curve has bull-flattened with UST 10-Year yield down 3.67 bps.
This Week's Events
  01/20 No Data - - - - - -  
  01/21 No Data - - - - - -  
  01/22 MBA Mortgage Applications 04:00 17 Jan - - 30.20% -  
  01/22 Chicago Fed Nat Activity Index 05:30 Dec 0.13 - 0.56 -  
  01/22 FHFA House Price Index MoM 06:00 Nov 0.30% - 0.20% -  
  01/22 Existing Home Sales 07:00 Dec 5.43m - 5.35m -  
  01/22 Existing Home Sales MoM 07:00 Dec 1.50% - -1.70% -  
  01/23 Initial Jobless Claims 05:30 18 Jan 214k - 204k -  
  01/23 Continuing Claims 05:30 11 Jan 1750k - 1767k -  
  01/23 Bloomberg Consumer Comfort 06:45 19 Jan - - 66.00 -  
  01/23 Leading Index 07:00 Dec -0.20% - 0.00% -  
  01/23 Kansas City Fed Manf. Activity 08:00 Jan -6.00 - -8.00 -  
  01/24 Markit US Manufacturing PMI 06:45 Jan P 52.50 - 52.40 -  
  01/24 Markit US Services PMI 06:45 Jan P 53.00 - 52.80 -  
  01/24 Markit US Composite PMI 06:45 Jan P - - 52.70 -
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