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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   1.472%  
  Support   1.680%  
  Resistance   1.546%  
  FN 2.5% Coupon   103.78 (+0.03)  
  Thursday, June 10, 2021

Stocks Rise Along with Consumer Prices; Bitcoin Put in Highest Risk Category

The Market opened today's session with treasuries lower across all maturities. The 10-year Treasury yield is currently at 1.4941, 0.33 bp higher than prior closing of 1.4908.

US stocks rose as investors assessed data that showed higher-than-anticipated consumer prices. Led by health-care stocks, the S&P 500 Index rose 0.2%, with nine of the main 11 S&P 500 industry groups climbing. Financial stocks were the outliers, with banks such as JPMorgan Chase, Bank of America, and Wells Fargo being the biggest laggards. Similarly, the tech-heavy Nasdaq 100 Index climbed 0.4%, heading towards its highest level since late April, as megacap tech stocks such as Amazon, Microsoft, Tesla, and Apple rallied. GameStop fell after the company said it planned to offer more shares and disclosed that regulators are investigating the trading of their stock. Other retail trader favorites were mixed, with some of the stocks that surged amid the frenzy on Wednesday giving back gains. The Labor Department released data showing that the consumer price index climbed 0.6%, the second-largest advance in more than a decade. Though it is distorted due to the pandemic, the CPI jumped 5% in a single year, the largest annual gain since 2008. Elsewhere, Banks will face the toughest capital requirements for holdings in Bitcoin as crypto assets have the potential for money laundering, reputational challenges, and wild swings that could lead to defaults. The Basel Committee on Banking Supervision proposed on Thursday that a 1,250% risk weight is to be applied to a bank’s exposure to Bitcoin and other cryptocurrencies. In practice, a bank would now need to hold a dollar in capital for each dollar worth of Bitcoin, based on an 8% minimum capital requirement. In other news, coming up on Friday, the Group of Seven leaders’ summit starts in Cornwall, England. 

The curve has bear-steepened with the UST 10-Year yield up 0.33 bp.

This Week's Events
  06/08 NFIB Small Business Optimism 03:00 May 101.00 99.60 99.80 -  
  06/09 MBA Mortgage Applications 04:00 4 Jun - -3.10% -4.00% -  
  06/10 CPI MoM 05:30 May 0.50% 0.60% 0.80% -  
  06/10 CPI YoY 05:30 May 4.70% 5.00% 4.20% -  
  06/10 CPI Index NSA 05:30 May 268.681 269.195 267.054 -  
  06/10 CPI Core Index SA 05:30 May 275.058 275.718 273.700 -  
  06/10 Initial Jobless Claims 05:30 5 Jun 370k 376k 385k -  
  06/10 Continuing Claims 05:30 29 May 3665k 3499k 3771k 3757k  
  06/11 U. of Mich. Sentiment 07:00 Jun P 84.20 - 82.90 -
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