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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   1.635%  
  Support   1.636%  
  Resistance   1.401%  
  FN 2.5% Coupon   103.50 (+0.05)  
  Wednesday, May 19, 2021

US Stocks Continue To Drift As Crypto Sinks

The market opened today's session with treasuries higher across all maturities. The 10-Year Treasury yield is currently at 1.6284, 0.85 bp lower than prior closing of 1.6369.

US tech stocks continued to decline on Wednesday as Bitcoin’s plunge caused crypto-related shares to drop. Additionally, commodity prices fell amid concerns about inflation. The Nasdaq 100 Index dropped 0.8%, extending its loss to about 7%. After Bitcoin sank to its lowest levels since January. Crypto shares such as Coinbase Global Inc, Marathon Digital Holdings Inc. and Riot Blockchain Inc. tumbled down 10%. Tesla also slipped after releasing data showing a slowdown in China sales. All 11 of the main S&P 500 industry groups led by energy and raw materials also declined. The Stoxx Europe 600 Index slumped as well. MBA mortgage applications rose 1.20% in the week ending on May 14, after rising 2.10% the prior week. Elsewhere, oil dropped on rising US stockpiles and the possibility of more supply from Iran. Coming up, the minutes from the Fed April meetings are released on Wednesday and are expected to provide clues on inflation recovery and how they plan to deal with it. Also on Wednesday, St. Louis Fed President James Bullard and Atlanta Fed President Raphael Bostic are scheduled to speak during separate events. Additionally, the EIA crude oil inventory report is also set to be released. On Thursday, IMF Managing Director Kristalina Gerogeiva and ECB President Christine Lagarde will speak at the Vienna Economic Dialogue.

The curve has bull-flattened with UST 10-Year yield down 0.85 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 - 1.20% 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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