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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   1.585%  
  Support   1.595%  
  Resistance   1.268%  
  FN 2.5% Coupon   103.80 (+0.02)  
  Wednesday, May 5, 2021

Stocks Pare Gains as ISM Index Unexpectedly Drops

The market opened today's session with treasuries lower across all maturities. The 10-Year Treasury yield is currently at 1.5978, 0.54 bp higher than prior closing of 1.5924.
US stocks pared gains after data showed a gauge of US service providers that unexpectedly fell last month, signaling an uneven rebound of the economy. The S&P 500 only rose 0.1%, almost wiping out its advance, with real-estate, industrial and retail companies leading losses. Peloton Interactive tumbled after a safety recall regarding treadmills, while General Motors Co. rallied on greater-than-expected profit growth. Energy and oil shares climbed. The Stoxx Europe 600 rose 1.5% and the Dow Jones Industrial Average was little changed. The Institute for Supply Management’s services index dropped to 62.7 last month from a record 63.7 in March. Traders also looked at data showing that private employers added the most jobs in seven months. Hiring is expected to gradually improve as the economy continues to open up and more Americans get vaccinated. The treasury kept its quarterly auction of long-term debt at a record size in order to help fund the continuous wave of stimulus expenditures. There may be additional challenges if Congress fails to change the federal debt limit when the current suspension runs out. Federal Reserve Bank of Chicago President Charles Evans said that inflation is unlikely to get out of control, despite this unprecedented government spending. The Bank of England rate decision comes out on Thursday. The April US employment report is released on Friday.
The curve has bear-steepened with UST 10-Year yield up 0.54 bp.
This Week's Events
  05/03 Markit US Manufacturing PMI 06:45 Apr F 60.70 60.50 60.60 -  
  05/03 Construction Spending MoM 07:00 Mar 1.60% 0.20% -0.80% -0.60%  
  05/03 ISM Prices Paid 07:00 Apr 86.00 89.60 85.60 -  
  05/04 Factory Orders 07:00 Mar 1.30% 1.10% -0.80% -0.50%  
  05/04 Durable Goods Orders 07:00 Mar F 0.50% 0.80% 0.50% -  
  05/04 Durables Ex Transportation 07:00 Mar F 1.60% 1.90% 1.60% -  
  05/05 MBA Mortgage Applications 04:00 30 Apr - -0.90% -2.50% -  
  05/05 ADP Employment Change 05:15 Apr 850k 742k 517k 565k  
  05/05 Markit US Services PMI 06:45 Apr F 63.10 64.70 63.10 -  
  05/05 Markit US Composite PMI 06:45 Apr F - 63.50 62.20 -  
  05/06 Initial Jobless Claims 05:30 1 May 535k - 553k -  
  05/06 Continuing Claims 05:30 24 Apr 3620k - 3660k -  
  05/07 Average Hourly Earnings MoM 05:30 Apr 0.00% - -0.10% -  
  05/07 Average Hourly Earnings YoY 05:30 Apr -0.40% - 4.20% -  
  05/07 Change in Nonfarm Payrolls 05:30 Apr 995k - 916k -
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