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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   95-08.5 (+03)  
  FN 2.5% Coupon   102-31 (+00.5)  
  Support   1.269%  
  Resistance   0.798%  
  Wednesday, April 7, 2021

Treasury Yields Decline as Stocks Continue to Fluctuate; Investors Wait for Fed Minutes

The market opened today's session with treasuries higher across all maturities. The 10-Year Treasury yield is at 1.6420, 1.40 bps lower than prior closing of 1.6560.
US stocks fluctuated as investors waited for the minutes of the Federal Reserve’s latest policy meeting, which would further elaborate on the central bank’s views on the bond-buying program and inflation. Following the slowest trading session for US exchanges this year, the S&P 500 Index saw little to no change. Tech companies experienced some losses whereas financial shares gained. Once again, Fed Chairman Jerome Powell reiterated on how policy makers will continue to refuse raising interest rates until there is enough evidence that the economy is fully healed from the pandemic’s impact. Furthermore, the Fed will continue to wait for proof of further progress in terms of employment and inflation goals before paring back its $120 billion in monthly bond purchases. In February, the US trade deficit widened to record highs as demand kept imports running ahead of shipments to overseas customers. According to Commerce Department data released on Wednesday, the trade gap for both goods and services reached $71.1 billion in February, a fair increase from January’s $67.8 billion. The US deficit has been continuously widening on a monthly basis after the three-year low experienced in February 2020. In late March, global supply chains were put to the test after the Suez Canal incident. Total imports decreased by 0.7% to $258.3 billion, whereas exports fell 2.6% to $187.3 billion. Imports for motor vehicles and consumer goods declined in February while industrial supplies increased. In terms of currencies, the Bloomberg Dollar Spot Index and the Euro both rose 0.1%. The West Texas Intermediate crude declined 0.3% to $59.13 a barrel and Gold weakened 0.4% to $1,736.05 an ounce. One of this week’s key events is the 2021 Spring Meetings of the IMF and World Bank Group, which are virtually taking place. On Thursday, Federal Reserve Chairman Jerome Powell takes part in a panel about the global economy. And on Friday, China’s consumer and producer prices data are due.
The curve has bull-flattened with UST 10-Year yield down 1.40 bps.
This Week's Events
  04/05 Markit US Services PMI 06:45 Mar F 60.20 60.40 60.00 -  
  04/05 Markit US Composite PMI 06:45 Mar F - 59.70 59.10 -  
  04/05 Factory Orders 07:00 Feb -0.50% -0.80% 2.60% 2.70%  
  04/05 Durable Goods Orders 07:00 Feb F -1.10% -1.20% -1.10% -  
  04/05 Durables Ex Transportation 07:00 Feb F -0.90% -0.90% -0.90% -  
  04/06 JOLTS Job Openings 07:00 Feb 6900 7367 6917 7099  
  04/07 MBA Mortgage Applications 04:00 2 Apr - -5.10% -2.20% -  
  04/08 Initial Jobless Claims 05:30 3 Apr 680k - 719k -  
  04/08 Continuing Claims 05:30 27 Mar 3638k - 3794k -  
  04/09 PPI Final Demand MoM 05:30 Mar 0.50% - 0.50% -  
  04/09 PPI Final Demand YoY 05:30 Mar 3.80% - 2.80% -
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