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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-10 (+06.5)  
  FN 2.5% Coupon   104-27 (+00.5)  
  Support   1.942%  
  Resistance   0.505%  
  Friday, August 14, 2020

Treasury Yields Lower As Retail Sales Slow

Market opened today’s session with treasuries edging higher across all maturities. 10-year Treasury yield is at 0.6963, 2.45 bps decreased from prior closing of 0.7208.

US stocks opened lower after a rebound in American Retail Sales slowed sharply in July, while European stocks opened lower after a fresh set of quarantine rules took hold in the UK. The dollar weakened as purchases in July increased by 1.20% from the prior month after an upwardly revised 8.40% gain in June. European stocks fell after Britain added France, Netherlands, and Malta to a list of countries from which people arriving have to quarantine for 14 days. Gold edged lower following two days of gains, while oil headed for a second weekly advance. With congress out of session until September, hopes of further fiscal stimulus come to a standstill. Today's published Retail Sales undershot expectations, showcasing a slow path in consumer recovery. On the virus front, Joe Biden said US governors should require masks for the next three months, while New Zealand recorded 12 new confirmed cases since May. Germany added the most cases since May, while the French Health Agency Jerome Salomon stated the situation in his country is worsening. Elsewhere, Industrial Production MoM met expectations, after reporting an increase of 3.00% for the month of July. This comes as a slight slowdown from prior months revised growth rate of 5.70%. Coming up on Monday August 17, the Empire Manufacturing index is posed to decrease as well, with the Federal Reserve expecting a figure of 14.50, in contrast to the current reported figure of 17.20.

The curve has bull-flattened with UST 10-Year yield down 2.45 bps.

This Week's Events
  08/10 JOLTS Job Openings 07:00 Jun 5300 5889 5397 5371  
  08/11 NFIB Small Business Optimism 03:00 Jul 100.50 98.80 100.60 -  
  08/11 PPI Final Demand MoM 05:30 Jul 0.30% 0.60% -0.20% -  
  08/11 PPI Final Demand YoY 05:30 Jul -0.70% -0.40% -0.80% -  
  08/12 MBA Mortgage Applications 04:00 7 Aug - 6.80% -5.10% -  
  08/12 CPI MoM 05:30 Jul 0.30% 0.60% 0.60% -  
  08/12 CPI YoY 05:30 Jul 0.70% 1.00% 0.60% -  
  08/12 CPI Index NSA 05:30 Jul 258.540 259.101 257.797 -  
  08/12 CPI Core Index SA 05:30 Jul 266.585 267.715 266.065 -  
  08/12 Monthly Budget Statement 11:00 Jul -$90.00B -$63.00B -$119.70B    
  08/13 Import Price Index MoM 05:30 Jul 0.60% 0.70% 1.40% -  
  08/13 Import Price Index YoY 05:30 Jul -3.10% -3.30% -3.80% -3.90%  
  08/13 Export Price Index MoM 05:30 Jul 0.40% 0.80% 1.40% 1.20%  
  08/13 Export Price Index YoY 05:30 Jul - -4.40% -4.40% -5.10%  
  08/13 Initial Jobless Claims 05:30 8 Aug 1100k 963k 1186k 1191k  
  08/13 Continuing Claims 05:30 1 Aug 15800k 15486k 16107k 16090k  
  08/13 Bloomberg Consumer Comfort 06:45 9 Aug - 43.70 44.90 -  
  08/14 U. of Mich. Sentiment 07:00 Aug P 72.00 72.80 72.50 -
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