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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   100-08.5 (+14.5)  
  FN 3.5% Coupon   103-01 (+02)  
  Support   2.759%  
  Resistance   1.721%  
  Thursday, January 23, 2020

Treasury Yields Lower as Stocks Slump

Market opened today’s session with treasuries rallying across all maturities. 10-Year Treasury yield is at 1.7273, 4.18 bps decreased from prior closing of 1.7691.

US stocks fell this morning amid growing concerns over potential impact of the SARS-like virus in China on corporate profits and global growth. China confirmed yesterday that there had been 571 cases with 17 deaths, and they shut down travel from Wuhan, the city where the virus started spreading. Investors remained cautious overnight and China’s Shanghai Composite Index plunged 2.8%, marking the biggest drop in eight months. Oil also got affected by the news on concerns that the virus could dent demand. WTI crude plunged this morning, trading slightly below $55 a barrel. Treasuries advanced as investors sought haven assets. In corporate news, both Comcast and Travelers dipped this morning despite their better-than-expected earnings figures. More than 12% of the S&P 500 has reported their results thus far and 70% of those companies have beaten analysts’ estimates.

Both Initial Jobless Claims and Continuing Claims came in below expectations, displaying steadily strong labor market. Initial Jobless Claims printed 211k vs. 205k revised prior and 214k consensus, and Continuing Claims printed 1731k vs. 1768k revised prior and 1756k consensus. Bloomberg Consumer Comfort remained unchanged at 66.00 and lastly, Leading Index in December dipped to -0.30% from an upwardly revised prior of 0.10% vs. -0.20% consensus. Later today, the US Treasury is scheduled to auction off 4-week and 8-week bills at 8:30 AM (PT), and $14 billion of 10-year TIPS at 10:00 AM (PT).

The curve has bull-flattened with UST 10-Year yield down 4.18 bps.
This Week's Events
  01/20 No Data - - - - - -  
  01/21 No Data - - - - - -  
  01/22 MBA Mortgage Applications 04:00 17 Jan - -1.20% 30.20% -  
  01/22 Chicago Fed Nat Activity Index 05:30 Dec 0.13 -0.35 0.56 0.41  
  01/22 FHFA House Price Index MoM 06:00 Nov 0.30% 0.20% 0.20% 0.40%  
  01/22 Existing Home Sales 07:00 Dec 5.43m 5.54m 5.35m -  
  01/22 Existing Home Sales MoM 07:00 Dec 1.50% 3.60% -1.70% -  
  01/23 Initial Jobless Claims 05:30 18 Jan 214k 211k 204k 205k  
  01/23 Continuing Claims 05:30 11 Jan 1756k 1731k 1767k 1768k  
  01/23 Bloomberg Consumer Comfort 06:45 19 Jan - 66.00 66.00 -  
  01/23 Leading Index 07:00 Dec -0.20% -0.30% 0.00% 0.10%  
  01/23 Kansas City Fed Manf. Activity 08:00 Jan -6.00 -1.00 -8.00 -  
  01/24 Markit US Manufacturing PMI 06:45 Jan P 52.40 - 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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