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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   100-08 (+04.5)  
  FN 2.5% Coupon   104-23.5 (+03.5)  
  Support   2.138%  
  Resistance   0.571%  
  Friday, July 10, 2020

Treasury Yields Decline as Coronavirus Cases Continue to Surge

Market opened today’s session with treasuries rallying across all maturities. 10-Year Treasury yield is at 0.5922, 2.13 bps decreased from prior closing of 0.6135.

Stocks fluctuated as investors weighed the spikes in coronavirus cases against the global economic recovery along with positive results on treatment. Gliead said remdesivir showed a sharp reduction in mortality risk when used to treat the virus. On the other hand, investors are looking for signals on what additional support from fiscal and monetary stimulus may be in the works as data showed record deaths in Florida, Texas and California as well as fears of a second wave in Asia are surging. Treasuries rallied with the five-year yield touching a record low. Elsewhere, WTI crude traded around $39 a barrel this morning and gold continued to show strength above $1,800 an ounce. Next week, second quarter results are set to release for some large US banks and it is projected to the worst since the financial crisis. With surging provisions for loan losses and slumping consumer spending, combined earnings at the four biggest US banks will likely be the lowest in more than a decade. In the economic calendar, the headline PPI in June fell to -0.20% from 0.40% prior and the core excluding food and energy also dropped to -0.30% from -0.10% prior.

The curve has bull-flattened with UST 10-Year yield down 2.13 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 5397 5046 4996  
  07/08 MBA Mortgage Applications 04:00 3 Jul - 2.20% -1.80% -  
  07/09 Initial Jobless Claims 05:30 4 Jul 1375K 1314K 1427K 1413K  
  07/09 Continuing Claims 05:30 27 Jun 18800K 18062K 19290K 18760K  
  07/09 Bloomberg Consumer Comfort 06:45 5 Jul - 42.90 43.30 -  
  07/10 PPI Final Demand MoM 05:30 Jun 0.40% -0.20% 0.40% -  
  07/10 PPI Final Demand YoY 05:30 Jun -0.20% -0.80% -0.80% -
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