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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   100-11.5 (-03)  
  FN 2.5% Coupon   104-17 (-01)  
  Support   2.081%  
  Resistance   0.559%  
  Friday, July 24, 2020

Treasury Yields Remain Flat as US-China Tensions Rise

Market opened today’s session with treasuries slightly edging lower across all maturities. 10-Year Treasury yield is at 0.5823, 0.49 bp increased from prior closing of 0.5774.

Stocks fell for a second day as tensions between the US and China deteriorated. China ordered the US to close its consulate in the southwestern city of Chengdu in a tit-for-tat retaliation to the closure of its diplomatic office in Houston. Tensions between the world’s two largest economies soared with the US government showing no efforts to deescalate matters. Tech sector led the loss in equities this morning with Intel plunging more than 17% after warning of a production delay. Treasuries and the dollar edged lower with 5-year Treasury yields reaching an all-time low before bouncing back. Elsewhere, gold topped $1,900 an ounce for the first time since 2011 as safe haven continued to show strength in demand. In the economic calendar, Markit US Manufacturing PMI edged higher to 51.30 from 49.80 prior and Services PMI also rose to 49.60 from 47.90 prior. New Home Sales climbed 13.80% to 776k from an upwardly revised prior of 682k vs. 700k consensus. Although the sunset date for the extra unemployment benefit is quickly approaching, the Republicans still need to iron out the details, and the release of their $1 trillion stimulus plan has been delayed until Monday before they begin negotiations with Democrats.

The curve has bear-steepened with UST 10-Year yield up 0.49 bp.
This Week's Events
  07/20 No Data - - - - - -  
  07/21 Chicago Fed Nat Activity Index 05:30 Jun 4.00 4.11 2.61 3.50  
  07/22 MBA Mortgage Applications 04:00 17 Jul - 4.10% 5.10% -  
  07/22 FHFA House Price Index MoM 06:00 May 0.30% -0.30% 0.20% 0.10%  
  07/22 Existing Home Sales 07:00 Jun 4.75m 4.72m 3.91m -  
  07/22 Existing Home Sales MoM 07:00 Jun 21.40% 20.70% -9.70% -  
  07/23 Initial Jobless Claims 05:30 18 Jul 1300k 1416k 1300k 1307k  
  07/23 Continuing Claims 05:30 11 Jul 17100k 16197k 17338k 17304k  
  07/23 Bloomberg Consumer Comfort 06:45 19 Jul - 44.70 44.30 -  
  07/23 Leading Index 07:00 Jun 2.10% 2.00% 2.80% 3.20%  
  07/24 Markit US Services PMI 06:45 Jul P 51.00 49.60 47.90 -  
  07/24 Markit US Composite PMI 06:45 Jul P - 50.00 47.90 -
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