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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   98-00.5 (+06)  
  FN 2.5% Coupon   105-10 (+00.5)  
  Support   0.902%  
  Resistance   0.658%  
  Friday, January 22, 2021

Treasury Yields Fall as Pandemic Toll Worsens

Market opened today's session with treasuries higher across all maturities. 10-Year Treasury yield is at 1.0940, 1.18 bps decreased from prior closing of 1.1058.

US equities opened lower this morning as rising COVID cases once again returned to focus. Notable early movers include Intel Corp., which saw shares fall after Pat Gelsinger, incoming CEO, recommitted to focusing on Intel's chip making business, a move opposed by investors due to the company lagging in manufacturing technology when compared to rival Taiwan Semiconductor Manufacturing Co. On the virus front, President Joe Biden continued to push for $1.9 trillion in COVID relief aid, while foreshadowing the virus will worsen before improving. In Europe, the British Pound lowered as Prime Minister Boris Johnson stated UK's third lockdown could potentially be extended through the summer. Restrictions tightened in Germany, UK, and Hong Kong, all the while, the European Central Bank warned the euro area could potentially see another recession. Vaccine shortages have taken place in Italy and Germany, with Italy forecasting a delay in vaccinations within the coming week, meanwhile Germany expects shortages to continue through the next six to eight weeks. Elsewhere, Bitcoin hovered around $31,000, all the while WTI crude and Gold both reported drops of 2.9% and 1.6%, respectively. On the economic front, Markit US Manufacturing PMI beat expectations after reporting at 59.10 for the month of January. Today's figure marks the highest reading since May 2007, however headwinds remain as pandemic related issues threaten to cause supply chain shortages inadvertently driving up material prices. US Home Sales beat expectations in the month of December, reporting at 6.76 million. 2020 marked the best year for Existing Home Sales since 2006, with historically low mortgage rates being the main driver behind the rise. Housing inventory continues to be limited as seen by a decline of 23% when compared to a year earlier, all the while median selling prices increased by 12.9% during December when compared to a year prior.

The curve has bull-flattened with UST 10-Year yield down 1.18 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 59.10 57.10 -  
  01/22 Markit US Composite PMI 06:45 Jan P - 58.00 55.30 -  
  01/22 Markit US Services PMI 06:45 Jan P 53.40 57.50 54.80 -
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