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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   98-10.5 (-12.5)  
  FN 2.5% Coupon   105-10.5 (-01.5)  
  Support   0.902%  
  Resistance   0.658%  
  Thursday, January 28, 2021

Treasury Yields Rise as Unemployment Figures Decline

Market opened today's session with treasuries lower across all maturities. 10-Year Treasury yield is at 1.0466, 3.05 bps increased from prior closing of 1.0161.
US stocks opened higher this morning on the back of strong economic data and corporate earnings. Retail traders continued to have a profound presence in stocks such as GameStop Corp., American Airlines Inc., and AMC Entertainment Holdings Inc., even as certain trading platforms took steps to limit action in those shares. Other notable gainers include Mastercard Inc. and Comcast Corp., both of which saw shares rise after exceeding earnings estimates, all the while, Apple Inc. lowered on cautionary outlook and Tesla Inc. lowered following lower than expected profit. Elsewhere, WTI crude and Gold both increased by 1% and 0.8%, respectively. On the economic front, Wholesale Inventories MoM failed to meet expectations after rising by 0.10% in the month of December. With imports and exports both rising by 1.40% and 4.60%, respectively, December's trade deficit narrowed by $3 billion from a month prior. Annualized GDP QoQ noted an increase of 4.00% during quarter four, after having noted an increase of 33.40% in the prior quarter. Notably, Personal Consumption increased by 2.50%, below an expected rise of 3.10%, all the while Consumer Spending increased by 4% after having noted a rise of 38% in quarter three. Initial Jobless Claims fell during the week ending January 23, reporting at 847K claims. Michigan, California, and Minnesota recorded the largest job cuts in December, with the largest gains being reported in Texas, Georgia, and North Carolina. Additionally, Continuing Claims saw a decrease of 274K while Pandemic Emergency Unemployment Claims increased by 837K. Elsewhere, New Home Sales failed to meet expectations after reporting at 842K for the month of December, a slight increase from prior months reported sales of 829K. 2020 recorded 811,000 home sales, the highest level in a decade, with cheap borrowing helping fuel a rise in demand even as the supply of new homes, when considered at the current sales pace, would be exhausted within 4.3 months. Reporting tomorrow are Personal Income and Spending, both expected at 0.10% and -0.40%, respectively.
The curve has bear-steepened with UST 10-Year yield up 3.05 bps.
This Week's Events
  01/25 Chicago Fed Nat Activity Index 05:30 Dec 0.10 0.52 0.27 0.31  
  01/26 S&P CoreLogic CS 20-City YoY NSA 06:00 Nov 8.70% 9.08% 7.95% 8.01%  
  01/26 S&P CoreLogic CS 20-City MoM SA 06:00 Nov 1.00% 1.42% 1.61% 1.59%  
  01/26 Conf. Board Consumer Confidence 07:00 Jan 89.00 89.30 88.60 87.10  
  01/26 Richmond Fed Manufact. Index 07:00 Jan 19.00 14.00 19.00 -  
  01/27 MBA Mortgage Applications  04:00 22 Jan - -4.10% -1.90% -  
  01/27 Durable Goods Orders 05:30 Dec P 1.00% 0.20% 1.00% 1.20%  
  01/28 Initial Jobless Claims 05:30 23 Jan 875k 847k 900k 914k  
  01/28 Continuing Claims 05:30 16 Jan 5088k 4771k 5054k 4974k  
  01/28 GDP Price Index 05:30 4Q A 2.20% 2.00% 3.50% -  
  01/28 Bloomberg Consumer Comfort 06:45 24 Jan - 45.70 43.70 -  
  01/28 Leading Index 07:00 Dec 0.30% 0.30% 0.60% 0.70%  
  01/29 PCE Deflator MoM 05:30 Dec 0.30% - 0.00% -  
  01/29 PCE Deflator YoY 05:30 Dec 1.20% - 1.10% -  
  01/29 U. of Mich. Sentiment 07:00 Jan F 79.20 - 79.20 -  
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