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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   107-25.5 (+11)  
  FN 3.5% Coupon   105-11 (00)  
  Support   2.483%  
  Resistance   0.547%  
  Thursday, May 7, 2020

Treasury Yields Lower amid Earnings and Economic Data

Market opened today’s session with treasuries advancing across all maturities. 10-Year Treasury yield is at 0.6742, 2.88 bps decreased from prior closing of 0.7030.

Initial Jobless Claims data showed another 3.169 million Americans filed for unemployment benefits last week following a revised data of 3.846 million in the week prior. The number topped 3 million for a seventh straight week and brought the seven-week total to 33.5 million. Continuing Claims also jumped to 22.647 million from an upwardly revised prior of 18.011 million. Lastly, Bloomberg Consumer Comfort again declined to 36.90 from 39.50 prior. Despite these disappointing economic data, stocks rallied along with oil as investors weighed on the US economy reopening soon. The tech-heavy Nasdaq also turned positive for 2020, making it the first of the three major indexes to recover its steep losses for the year. That rebound was largely driven by sharp gains in big tech stocks such as Facebook, Amazon, Apple, Netflix and Alphabet. On the trade front, Chinese and American trade negotiators will speak as soon as next week after President Trump threatened to terminate the phase one deal if China did not adhere to the agreed terms since the pandemic pushed Chinese purchases of US goods far behind the schedule. Treasuries edged higher this morning with mortgages slightly outperforming Treasuries, and WTI crude jumped above $26 a barrel after Saudi Arabia raised prices.

The curve has bull-flattened with UST 10-Year yield down 2.88 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 - 0.10% -3.30% -  
  05/06 ADP Employment Change 05:15 Apr -20550k -20236k -27k -149k  
  05/07 Initial Jobless Claims 05:30 2 May 3000k 3169k 3839k 3846k  
  05/07 Continuing Claims 05:30 25 Apr 19800k 22647k 17992k 18011k  
  05/07 Bloomberg Consumer Comfort 06:45 3 May - 36.90 39.50 -  
  05/08 Change in Nonfarm Payrolls 05:30 Apr -21600k - -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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