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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   107-31.5 (-08)  
  FN 3.5% Coupon   105-16.5 (00)  
  Support   2.483%  
  Resistance   0.547%  
  Tuesday, May 5, 2020

Treasury Yields Rise as Stocks Gain along with Oil

Market opened today’s session with treasuries edging lower across all maturities. 10-Year Treasury yield is at 0.6619, 2.83 bps increased from prior closing of 0.6336.

US stocks rose this morning as investors weighed that the US economy could start reopening again soon. Oil headed for its longest winning streak in nine months with WTI crude trading above $23 a barrel this morning. Energy shares led the rally in equities amid the recovery in crude and shares of companies that would benefit from easing of coronavirus lockdowns such as Starbucks and MGM gained in premarket as well. On the pandemic front, California, the first state to shut down its economy, will start loosening its lockdown on Friday, allowing some of the state’s retailers to offer curbside pickup as Governor Gavin Newsom expressed confidence that the coronavirus outbreak had reached a peak. In China, its state media attacked Secretary of State Michael Pompeo, calling him evil and a liar after he had said that there was a significant amount of evidence of the coronavirus originating in a lab in Wuhan. In the economic calendar, US exports of goods and services plunged by a record and imports declined by the most in 11 years in March. The trade deficit widened to $44.40 billion from a revised data of $39.80 billion in February. Both Markit US Services PMI and Composite PMI fell to 26.70 and 27.00 from prior readings of 27.00 and 27.40, respectively. Lastly, ISM Non-Manufacturing Index in April slumped to 41.80 from 52.50 prior.

The curve has bear-steepened with UST 10-Year yield up 2.83 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 26.70 27.00 -  
  05/05 Markit US Composite PMI 06:45 Apr F - 27.00 27.40 -  
  05/06 MBA Mortgage Applications 04:00 1 May - - -3.30% -  
  05/06 ADP Employment Change 05:15 Apr -21000k - -27k -  
  05/07 Initial Jobless Claims 05:30 2 May 3000k - 3839k -  
  05/07 Continuing Claims 05:30 25 Apr 19800k - 17992k -  
  05/07 Bloomberg Consumer Comfort 06:45 3 May - - 39.50 -  
  05/08 Change in Nonfarm Payrolls 05:30 Apr -21550k - -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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