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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-21 (+09)  
  FN 3.5% Coupon   105-12.5 (00)  
  Support   2.426%  
  Resistance   0.580%  
  Thursday, May 21, 2020

Treasury Yields Lower after Jobless Claims Data

Market opened today’s session with treasuries slightly edging higher across all maturities. 10-Year Treasury yield is currently at 0.6736, 0.65 bp decreased from prior closing of 0.6801.

The Labor Department reported that another 2.438 million American filed for unemployment benefits last week which brought the total number of claims during the pandemic to more than 38 million. The prior reading was downwardly revised from 2.981 million to 2.687 million after a clerical error by Connecticut labor officials. Continuing Claims also surged to 25.073 million, marking its highest level on record. US stocks fluctuated on the claims data as well as on rising tensions between the US and China. The Senate overwhelmingly passed a bill that could bar some Chinese companies such as Alibaba and Baidu from listing on US exchanges. In addition, President Trump upped his attacks on China, targeting China’s President Xi that the disinformation comes from the top. Treasuries slightly advanced and crude oil gained for a sixth consecutive session after a drop in US stockpiles. In the remainder of the economic calendar, both Markit US Manufacturing PMI and Services PMI rose to 39.8 and 36.9 from prior readings of 36.1 and 26.7, respectively while Leading Index in April improved to -4.40% from a downwardly revised prior of -7.40% vs -5.40% consensus. Lastly, Existing Home Sales in April dropped 17.80% to 4.33 million from 5.27 million, marking its sharpest decline since July 2010.

The curve has bull-flattened with UST 10-Year yield down 0.65 bp.

This Week's Events
  05/18 NAHB Housing Market Index 07:00 May 35 37 30 -  
  05/19 Housing Starts 05:30 Apr 900k 891k 1216k 1276k  
  05/19 Housing Starts MoM 05:30 Apr -26.00% -30.20% -22.30% -18.60%  
  05/19 Building Permits 05:30 Apr 1000k 1074k 1353k 1356k  
  05/19 Building Permits MoM 05:30 Apr -25.90% -20.80% -6.80% -5.70%  
  05/20 MBA Mortgage Applications 04:00 15 May - -2.60% 0.30% -  
  05/21 Philadelphia Fed Business Outlook 05:30 May -40.00 -43.10 -56.60 -  
  05/21 Initial Jobless Claims 05:30 16 May 2400k 2438k 2981k 2687k  
  05/21 Continuing Claims 05:30 9 May 24250k 25073k 22833k 22548k  
  05/21 Bloomberg Consumer Comfort 06:45 17 May - 34.70 35.80 -  
  05/21 Markit US Services PMI 06:45 May P 32.50 36.90 26.70 -  
  05/21 Markit US Composite PMI 06:45 May P - 36.40 27.00 -  
  05/21 Existing Home Sales 07:00 Apr 4.22m 4.33m 5.27m -  
  05/21 Existing Home Sales MoM 07:00 Apr -19.90% -17.80% -8.50% -  
  05/21 Leading Index 07:00 Apr -5.40% -4.40% -6.70% -7.40%
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