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Market Commentary

Market Commentary


Today's Coupons
  10-Year Notes   108-03.5 (-08)  
  FN 3.5% Coupon   105-17.5 (-02)  
  Support   2.483%  
  Resistance   0.547%  
  Monday, May 4, 2020

Treasury Yields Rise as Airlines Lead Sell-off in Equities

Market opened today’s session with treasuries edging lower across all maturities. 10-Year Treasury yield is at 0.6447, 3.29 bps increased from prior closing of 0.6118.

US stocks started the week with a loss as US-China tension flared again. President Trump promised a conclusive report on the Chinese origins of the pandemic yesterday after Secretary of State Pompeo said that there was an enormous evidence that the virus began in a laboratory in Wuhan. Consequently, investors are now concerned that the reignited tensions between the US and China will lead to a reemergence of the trade war. Also, over the weekend, Warren Buffet said Berkshire Hathaway sold all of its major airline holdings which showed his concern that the pandemic has permanently changed certain industries. Airlines including Delta, American, and United led the sell-off in stocks this morning. Treasuries drifted and the dollar strengthened against its major peers. Elsewhere, WTI crude halted a three-day 60% rally, trading slightly below $20 a barrel this morning. Data released in economic calendar continued to display the economic damages from the pandemic. Factory Orders plunged to -10.30% from a downwardly revised prior of -0.10% vs. -9.70% consensus. The headline Durable Goods Orders also slumped to -14.70% from -14.40% prior with the core falling to -0.40% from -0.20% prior.

The curve has bear-steepened with UST 10-Year yield up 3.29 bps.
This Week's Events
  05/04 Durable Goods Orders 07:00 Mar F -14.40% -14.70% -14.40% -  
  05/04 Durables Ex Transportation 07:00 Mar F -0.20% -0.40% -0.20% -  
  05/05 Markit US Services PMI 06:45 Apr F 27.00 - 27.00 -  
  05/05 Markit US Composite PMI 06:45 Apr F - - 27.40 -  
  05/06 MBA Mortgage Applications 04:00 1 May - - -3.30% -  
  05/06 ADP Employment Change 05:15 Apr -20000k - -27k -  
  05/07 Initial Jobless Claims 05:30 2 May 3000k - 3839k -  
  05/07 Continuing Claims 05:30 25 Apr 19600k - 17992k -  
  05/07 Bloomberg Consumer Comfort 06:45 3 May - - 39.50 -  
  05/08 Change in Nonfarm Payrolls 05:30 Apr -21250k - -701k -  
  05/08 Average Hourly Earnings MoM 05:30 Apr 0.40% - 0.40% -  
  05/08 Average Hourly Earnings YoY 05:30 Apr 3.30% - 3.10% -  
  05/08 Wholesale Inventories MoM 07:00 Mar F -1.00% - -1.00% -
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