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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   95-13 (-26.5)  
  FN 2.5% Coupon   102-31 (-13)  
  Support   1.248%  
  Resistance   0.878%  
  Friday, March 12, 2021

Treasury Yields Rise as Tech Stocks Resume Decline

Market opened today's session with treasuries lower across all maturities. 10-year Treasury yield is at 1.6177, 8.07 bps increased from prior closing of 1.5370.

US stocks opened lower this morning as technology shares sent tech-heavy Nasdaq lower by 1.9%. Notable movers this morning include Tencent Holdings Ltd., which saw shares drop following news China's antitrust watchdog was cracking down on the company's business practices. Similar antitrust suits had been previously made against Jack Ma's Ant Group Co. and Alibaba Group Holding Ltd. European markets were also down this morning, with Italy noting a resurgence in virus cases. Elsewhere, WTI crude lowered by 0.3% towards $65.81 a barrel, meanwhile Gold declined by 1.1% to $1,704.10 an ounce. On the economic front, PPI Final Demand MoM reported in line with expectations of a 0.50% increase during the month of February. Noting an advance of 2.80% in February, Producer Price Index jumped on the back of increased inflation, with PPI only increasing by 2.50% when excluding volatile components such as food and energy. Furthermore, when adjusting for food, energy, and trade prices, PPI increased by only 2.20%, the highest point it has reached since May 2019. Gas prices noted a 13.1% gain and accounted for 40% of PPI figures. The University of Michigan Sentiment Index beat expectations after reporting at 83.00 for the month of March. On the back of strong sentiment stemming from increased fiscal aid and vaccination progression, today's figure increased by 6.8 index points over the previously reported advance. Notably, consumer outlook increased the most on jobs, while increasing to a lesser extent on vehicles and homes, given higher expected interest rates. Reporting on Monday is Empire Manufacturing, with expectations set at 14.50 for the month of March.

The curve has bear-steepened with UST 10-Year yield up 8.07 bps.

This Week's Events
  03/09 NFIB Small Business Optimism 03:00 Feb 97.00 95.80 95.00 -  
  03/10 MBA Mortgage Applications 04:00 5 Mar - -1.30% 0.50% -  
  03/10 CPI MoM 05:30 Feb 0.40% 0.40% 0.30% -  
  03/10 CPI YoY 05:30 Feb 1.70% 1.70% 1.40% -  
  03/10 CPI Index NSA 05:30 Feb 263.121 263.014 261.582 -  
  03/10 CPI Core Index SA 05:30 Feb 270.394 270.299 270.025 -  
  03/11 Initial Jobless Claims 05:30 6 Mar 725k 712k 745k 754k  
  03/11 Continuing Claims 05:30 27 Feb 4200k 4144k 4295k 4337k  
  03/11 JOLTS Job Openings 07:00 Jan 6700 6917 6646 6752  
  03/12 PPI Final Demand MoM 05:30 Feb 0.50% 0.50% 1.30% -  
  03/12 PPI Final Demand YoY 05:30 Feb 2.70% 2.80% 1.70% -  
  03/12 U. of Mich. Sentiment 07:00 Feb P 78.50 83.00 76.80 -
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