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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   1.668%  
  Support   1.615%  
  Resistance   1.337%  
  FN 2.5% Coupon   103.28 (+0.06)  
  Thursday, May 13, 2021

Technology Shares Pare Gains; Inflation Concerns Continue

The Market opened today's session with treasuries higher across all maturities. The 10-year Treasury yield is currently at 1.6642, 2.74 bps lower than prior closing of 1.6916.

Tech company shares traded at the highest levels of the day as US equities rallied as signs of a strengthened labor market helped to temper concerns over increasing price pressures. Tesla weighed on the tech-heavy Nasdaq 100 after CEO Elon Musk said the company is suspending purchases using Bitcoin, triggering a slide in the digital currency. Financials and utilities helped the benchmark S&P 500 halt a three-day slide, rising 1.1%. Energy was the only one of the 11 market sectors to decline. A report earlier showed producer prices increased by more than forecast in April, and Jobless Claims fell. Confidence regarding the US economy and the continued Federal Reserve stimulus has been jolted in the past week with non-farm payrolls falling far short of expectations and inflation rising by the most since 2009. While some investors insist the surge in consumer prices is a one-off reopening burst, the broader markets are hedging against the possibility it may persist and force the Fed to consider tapering its stimulus. In Europe, earnings disappointments sent the benchmark gauge lower. BT Group Plc dropped as it missed estimates. Burberry Group Plc declined as guidance disappointed. Treasury markets were calmer, with the 10-year rate holding near 1.69%. West Texas Intermediate crude fell 3.3%, the most since April 5.

The curve has bull-flattened with the UST 10-Year yield down 2.74 bps.

This Week's Events
  05/11 NFIB Small Business Optimism 03:00 Apr 100.80 99.80 98.20 -  
  05/12 MBA Mortgage Applications 04:00 7 May - 2.10% -0.90% -  
  05/12 CPI MoM 05:30 Apr 0.20% 0.80% 0.60% -  
  05/12 CPI YoY 05:30 Apr 3.60% 4.20% 2.60% -  
  05/12 CPI Index NSA 05:30 Apr 265.600 267.054 264.877 -  
  05/12 CPI Core Index SA 05:30 Apr 271.922 273.700 271.214 -  
  05/13 Initial Jobless Claims 05:30 8 May 490k 473k 498k 507k  
  05/13 Continuing Claims 05:30 1 May 3650k 3655k 3690k 3700k  
  05/14 Import Price Index YoY 05:30 Apr 10.20% - 6.90% -  
  05/14 U. of Mich. Sentiment 07:00 May P 90.20 - 88.30 -
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