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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-10 (-08.5)  
  FN 2.5% Coupon   104-05 (-00.5)  
  Support   2.138%  
  Resistance   0.620%  
  Monday, July 6, 2020

Treasury Yields Climb as Stocks Continue to Rally Globally

Market opened today’s session with treasuries selling-off across all maturities. 10-Year Treasury yield is at 0.6907, 2.14 bps increased from prior closing of 0.6693.

Stocks climbed this morning after a rally in Chinese equities pushed a global equity benchmark toward a one-month high. The Shanghai Composite Index posted its biggest advance since 2015, fueling bullish spirits around the world. In corporate news, stocks tied to the reopening gained including airlines, retailers, and cruise lines. Uber also surged after it agreed to buy Postmate in a $2.65 billion all-stock deal. Despite the upbeat mood in the markets, the coronavirus cases kept deteriorating over the weekend where the US saw the biggest spike with 130,000 new confirmed cases. Banks are now reducing some of their forecasts for growth this year. Goldman Sachs economists revised their estimate for the U.S. slump in 2020 to a 4.6% contraction, while reducing their year-end unemployment forecast to 9%. JPMorgan Chase & Co. see global debt levels surging $16 trillion this year, bringing combined public and private sector borrowing past $200 trillion for the first time. Treasuries dipped and the dollar fell for a fifth day. Elsewhere, WTI crude edged lower this morning, trading below $41 a barrel. In the economic calendar, Markit Services PMI rose to 47.90 from 46.70 prior and Composite PMI also climbed to 47.90 from 46.80 prior. Lastly, ISM Non-Manufacturing Index in June surged to 57.10 from 45.40 prior.

The curve has bear-steepened with UST 10-Year yield up 2.14 bps.
This Week's Events
  07/06 Markit US Services PMI 06:45 Jun F 46.90 47.90 46.70 -  
  07/06 Markit US Composite PMI 06:45 Jun F - 47.90 46.80 -  
  07/07 JOLTS Job Openings 07:00 May 4500 - 5046 -  
  07/08 MBA Mortgage Applications 04:00 3 Jul - - -1.80% -  
  07/09 Initial Jobless Claims 05:30 4 Jul 1375K - 1427K -  
  07/09 Continuing Claims 05:30 27 Jun 18800K - 19290K -  
  07/09 Bloomberg Consumer Comfort 06:45 5 Jul - - 43.30 -  
  07/10 PPI Final Demand MoM 05:30 Jun 0.40% - 0.40% -  
  07/10 PPI Final Demand YoY 05:30 Jun -0.20% - -0.80% -
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