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Market Commentary

Market Commentary


Today's Coupons
  10-Year Notes   97-00 (-12.5)  
  FN 2.5% Coupon   103-15 (-07.5)  
  Support   1.182%  
  Resistance   0.844%  
  Monday, March 1, 2021

Treasury Yields Rise as Market Rebounds

Market opened today's session with treasuries lower across all maturities. 10-Year Treasury yield is at 1.4461, 4.12 bps increased from prior closing of 1.4049.
US stocks opened higher this morning as the S&P 500 noted a 2% jump, the highest increase in over four months. Notable early movers include Johnson & Johnson, which saw shares higher following a recommendation by the CDC for the usage of its COVID-19 shot. Elsewhere, WTI Crude and Gold both increased by 0.4% and 0.1%, respectively. On the economic front, US Manufacturing PMI reported at 58.60, slightly better than expected for the month of February. Notably, the index reported its lowest reading since December, 2020, yet still higher than the reported value of 50.70 a year ago. Supplier delivery times also reported the lowest value since reports began, meanwhile employment increases over a prior month increased by the largest amount since 2014. Construction Spending MoM outperformed expectations after reporting an increase of 1.70% for the month of January. Key takeaways from today's report include an increase in private residential construction of 2.50%, all the while public construction increased by 1.70%. Government construction spending accounted for 23.8% of total spending in January. ISM Manufacturing also noted a beat over expectations, after having reported at 60.80 for the month of February. Notably, price pressure stemmed from supply shortages and difficulties hiring more workers, all of which could contribute to future consumer inflation. Reporting later this week on Wednesday, the Federal Reserve will present its Beige Book, and on Thursday OPEC+ will meet, in addition to which, US Factory Orders, Initial Jobless Claims and Durable Good Orders will all present figures. The US unemployment report is set to release Friday, providing further insight into the state of the US labor market.
The curve has bear-steepened with UST 10-Year yield up 4.12 bps.
This Week's Events
  03/01 Markit US Manufacturing PMI 06:45 Feb F 58.50 58.60 58.50 -  
  03/01 Construction Spending MoM 07:00 Jan 0.80% 1.70% 1.00% 1.10%  
  03/01 ISM Prices Paid 07:00 Feb 80.00 86.00 82.10 -  
  03/03 MBA Mortgage Applications 04:00 26 Feb - - -11.40% -  
  03/03 ADP Employment Change 05:15 Feb 200k - 174k -  
  03/03 Markit US Services PMI 06:45 Feb F 58.90 - 58.90 -  
  03/03 Markit US Composite PMI 06:45 Feb F - - 58.80 -  
  03/04 Initial Jobless Claims 05:30 27 Feb 750k - 730k -  
  03/04 Continuing Claims 05:30 20 Feb 4300k - 4419k -  
  03/04 Factory Orders 07:00 Jan 2.10% - 1.10% -  
  03/04 Durable Goods Orders 07:00 Jan F 3.40% - 3.40% -  
  03/04 Durables Ex Transportation 07:00 Jan F 1.40% - 1.40% -  
  03/05 Average Hourly Earnings MoM 05:30 Feb 0.20% - 0.20% -  
  03/05 Average Hourly Earnings YoY 05:30 Feb 5.30% - 5.40% -  
  03/05 Change in Nonfarm Payrolls 05:30 Feb 188k - 49k -
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