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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   95-19 (+01.5)  
  FN 2.5% Coupon   102-31.5 (+01.5)  
  Support   1.312%  
  Resistance   0.902%  
  Thursday, March 25, 2021

Treasury Yields Fall, US Stocks Decline, and Oil Drops Amid Suez Block

Market opened today's session with treasuries higher across all maturities. 10-Year Treasury yield is at 1.6015, 0.69 bp decreased from prior closing of 1.6084.
US stocks fell off the record high they reached a week ago soon after Chairman Jerome Powell’s announcement of fiscal stimulus and vaccination progress due to the Federal Reserve’s upbeat economic forecast. Investors now assess the outlook for economic growth and inflation. The ongoing blockage of the Suez Canal has brought Oil prices further down. A large backlog of ships continues to build up as diggers are on their third day of attempting to dislodge the ship. The Suez Canal Authority has temporarily suspended traffic along the waterway. Around 12% of global trade goes through the Suez Canal, making it a crucial piece within global commerce. This has added another setback for global supply chains who are already strained by the e-commerce boom linked to the pandemic. In terms of unemployment, Initial Jobless Claims have fallen more than anticipated. The new pandemic low has now been marked at 684k, with expectations of this downtrend to continue as the economy recovers. In addition, the labor-market recovery is also expected to accelerate given increasing vaccinations and loosening business restrictions. Additionally, the Nasdaq 100 led declines in the US, signaling further declines in tech stocks. Nike Inc. also fell as boycotts in China ensued due to the company’s practice of not sourcing its cotton from the Xinjiang region. Last month’s poor demand for seven-year Treasuries triggered a global sell-off in government debt and interest-rate sensitive stocks. This has gotten the attention of investors who now look into Thursday’s seven-year Treasury auction. Stocks in Europe have plummeted due to concerns over lockdown extensions and vaccine halts. Bitcoin reached their lowest intraday price since March 15 by falling 6.7%. Some key events to look at this week are the USTreasury auctions of seven-year debt and the US personal income and spending data that comes out on Friday. 
The curve has bull-steepened with UST 10-Year yield down 0.69 bp.
This Week's Events
  03/22 Chicago Fed Nat Activity Index 05:30 Feb 0.72 -1.09 0.66 0.75  
  03/23 Richmond Fed Manufact. Index 07:00 Mar 16.00 17.00 14.00 -  
  03/24 MBA Mortgage Applications  04:00 19 Mar - -2.50% -2.20% -  
  03/24 Durable Goods Orders 05:30 Feb P 0.60% -1.10% 3.40% 3.50%  
  03/24 Markit US Manufacturing PMI 06:45 Mar P 59.50 59.00 58.60 -  
  03/24 Markit US Composite PMI 06:45 Mar P - 59.10 59.50 -  
  03/24 Markit US Services PMI 06:45 Mar P 60.10 60.00 59.80 -  
  03/25 Initial Jobless Claims 05:30 20 Mar 730k 684k 770k 781k  
  03/25 Continuing Claims 05:30 13 Mar 4000k 3870k 4124k 4134k  
  03/25 GDP Price Index 05:30 4Q T 2.10% 2.00% 2.10% -  
  03/26 PCE Deflator MoM 05:30 Feb 0.30% - 0.30% -  
  03/26 PCE Deflator YoY 05:30 Feb 1.60% - 1.50% -  
  03/26 U. of Mich. Sentiment 07:00 Mar F 83.60 - 83.00 -  
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