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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   98-02.5 (-08)  
  FN 2.5% Coupon   105-12 (-00.5)  
  Support   0.902%  
  Resistance   0.658%  
  Friday, January 29, 2021

Treasury Yields Rise with all eyes on GameStop and AMC

Market opened today's session with treasuries lower across all maturities. 10-Year Treasury yield is at 1.0910, 4.61 bps increased from prior closing of 1.0449.
US equities dropped this morning as day traders bid heavily shorted stocks, speculating hedge funds would need to reduce their exposure within those securities. Notable early movers include GameStop Corp. and AMC Entertainment Holdings Inc. as brokers began easing previously imposed restrictions. Johnson & Johnson also saw shares rise after stating its vaccine generated significant protection against COVID-19, although less effective on the South Africa strand. Elsewhere, Bitcoin increased by more than 10%, along with WTI Crude and Gold, both of which rose by 1.3% and 1%, respectively. On the economic front, Personal Income for the month of December beat expectations after reporting an increase of 0.60%. Additionally, Personal Spending saw a decline of 0.20% during December, reporting slightly better than expected. Growth in Personal Income can be attributed to the passing of $900 billion in pandemic relief late-December, all the while, services spending and good purchases saw declines, with the latter dropping by 1.4%. Elsewhere, MNI Chicago PMI beat expectations for the month of January after having reported at 63.80. Notably only the fall in employment signalled contraction, with all other index related indicators such as increasing new orders, higher inventory, increased production, and longer backorders contributed to signalling an expansionary economy. The University of Michigan Consumer Sentiment Index slightly missed expectations after reporting a decline towards 79.00 for the month of January. The reading indicates Americans still face future uncertainty in regards to employment and the economy, although new stimulus and progress towards slowing the spread of the pandemic through vaccination helps instigate optimism. Reporting on Monday are Manufacturing PMI and Construction Spending MoM, both expected at 59.10 and 0.80%, respectively.
The curve has bear-steepened with UST 10-Year yield up 4.61 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% 0.40% 0.00% -  
  01/29 PCE Deflator YoY 05:30 Dec 1.20% 1.30% 1.10% -  
  01/29 U. of Mich. Sentiment 07:00 Jan F 79.40 79.00 79.20 -  
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