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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   97-28.5 (-07.5)  
  FN 2.5% Coupon   105-11 (+02)  
  Support   0.902%  
  Resistance   0.658%  
  Thursday, January 21, 2021

Treasury Yields Rise as Stocks Hover Around Record Highs

Market opened today's session with treasuries lower across all maturities. 10-Year Treasury yield is at 1.0990, 1.88 bps increased from prior closing of 1.0802.

US stocks opened higher this morning after having closed at record highs yesterday. The S&P 500 moved higher as President Joe Biden pushed for $1.9 trillion in federal aid. In Europe, the euro advanced as the European Central Bank left rates at current levels and confirmed its pandemic purchase program would amount to 1.85 trillion euros, with President Christine Lagarde citing risks imposed by the virus in the need for further aid. Elsewhere, WTI crude lowered by 0.6% while Gold also saw a decline of 0.3% towards $1,865.77 an ounce. On the economic front, Housing Starts beat expectations after reporting at 1.669mm for the month of December. Residential starts in particular increased by 5.8%, meanwhile applications to build increased by 4.5% towards an annualized rate of 1.71mm, the highest level since 2006. Initial Jobless Claims for the week ending January 16 came in lower than expected after reporting at 900K. While today's figure remains high and virus cases continue to propagate, the economic impact from those cases carries a limited impact on economic activity, and when coupled with increased fiscal aid, future economic prospects bode well. Notably, Initial Jobless Claims in regular state programs lowered by 26K in the week ending January 16, meanwhile Continuing Claims in state programs lowered by 127K towards 5.05mm in the week ending January 9. Reporting tomorrow are US Manufacturing PMI and Existing Home Sales, with expectations set at 56.50 and 6.56mm, respectively.

The curve has bear-steepened with UST 10-Year yield up 1.88 bps.
This Week's Events
  01/20 MBA Mortgage Applications 04:00 15 Jan - -1.90% 16.70% -  
  01/21 Building Permits 05:30 Dec 1608k 1709k 1639k 1635k  
  01/21 Building Permits MoM 05:30 Dec -1.70% 4.50% 6.20% 5.90%  
  01/21 Housing Starts 05:30 Dec 1560k 1669k 1547k 1578k  
  01/21 Housing Starts MoM 05:30 Dec 0.80% 5.80% 1.20% 3.10%  
  01/21 Initial Jobless Claims 05:30 16 Jan 935k 900k 965k 926k  
  01/21 Continuing Claims 05:30 9 Jan 5300k 5054k 5271k 5181k  
  01/21 Bloomberg Consumer Comfort 06:45 17 Jan - 43.70 43.20 -  
  01/22 Markit US Manufacturing PMI 06:45 Jan P 56.50 - 57.10 -  
  01/22 Markit US Composite PMI 06:45 Jan P - - 55.30 -  
  01/22 Markit US Services PMI 06:45 Jan P 53.40 - 54.80 -
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