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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   1.647%  
  Support   1.449%  
  Resistance   0.798%  
  FN 2.5% Coupon   103.41 (+0.02)  
  Tuesday, May 18, 2021

Treasury Yields Drift on Disappointing Economic Data

Market opened today's session with treasuries nearly unchanged across all maturities. 10-Year Treasury yield is at 1.6471, 0.17 bp decreased from prior closing of 1.6488.

US tech stocks rose early this morning on optimism that the economic reopening will boost growth which was later offset by disappointing housing starts data from the last month. The Nasdaq 100 inched higher for the third time in four sessions, led by Amazon, Tesla, and Alphabet. Better-than-expected earnings results from big retailers including Walmart, Macy’s and Home Depot also helped the investor sentiment. With about 90% of the S&P 500 companies having reported their results so far, 86% of them have posted positive first quarter results. On the other side, economic data released today dampened the optimism a bit as Housing Starts in April tumbled 9.50% to 1569k from revised prior reading of 1733k. Fed Vice Chair Clarida also said that the weak jobs report indicated that our economy had not yet reached the level to support the tapering of asset purchases by the Fed. Elsewhere, crude oil sank to session lows after a significant progress had been reportedly made in the nuclear talks between the US and Iran. Bitcoin also fell to the lowest level since February after the People’s Bank of China reiterated that the cryptocurrency would not be accepted as a form of payment.

The curve has bull-steepened with UST 10-Year yield down 0.17 bp.
This Week's Events
  05/17 Empire Manufacturing 05:30 May 23.90 24.30 26.30 -  
  05/18 Building Permits 05:30 Apr 1770k 1760k 1766k 1755k  
  05/18 Building Permits MoM 05:30 Apr 0.60% 0.30% 2.70% 2.30%  
  05/18 Housing Starts 05:30 Apr 1704k 1569k 1739k 1733k  
  05/18 Housing Starts MoM 05:30 Apr -2.00% -9.50% 19.40% 19.80%  
  05/19 MBA Mortgage Applications 04:00 14 May - - 2.10% -  
  05/20 Initial Jobless Claims 05:30 15 May 450k - 473k -  
  05/20 Continuing Claims 05:30 8 May 3630k - 3655k -  
  05/20 Leading Index 07:00 Apr 1.30% - 1.30% -  
  05/21 Markit US Manufacturing PMI 06:45 May P 60.10 - 60.50 -  
  05/21 Markit US Services PMI 06:45 May P 64.40 - 64.70 -  
  05/21 Markit US Composite PMI 06:45 May P - - 63.50 -
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