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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-27.5 (-01)  
  FN 2.5% Coupon   105-04 (+01.5)  
  Support   1.942%  
  Resistance   0.505%  
  Monday, August 24, 2020

Treasury Yields Lower as the FDA Fast-Tracks COVID Treatment

Market opened today’s session with treasuries slightly higher across all maturities. 10-Year Treasury yield is at 0.6234, 0.48 bp decreased from prior closing of 0.6282.

US equities opened higher this morning following news that the Trump administration may fast-track vaccines and treatments for coronavirus. Early gainers included AstraZeneca Plc and travel stocks such as American Airlines Group Inc. and United Airline Holdings Inc. The dollar weakened while gold traded near $1,950 an ounce. Main catalyst for today's market jump is attributed to news that the Food and Drug Administration is working towards expanding access to virus treatment involving blood plasma from recovered patients. Additionally, the Financial Times reported that the Trump administration is considering whether to bypass regulatory standards in order to accelerate an experimental vaccine. Elsewhere, asian stocks received a  boost following a report that White House officials have reassured small businesses that the WeChat ban will not be as broad as feared. WeChat owner Tencent Holdings Ltd. jumped the most in a month on the news, gaining $37 billion. In the US, storms Marco and Laura continue rolling toward the Gulf Coast where they will come onshore as hurricanes as soons as Monday. 58% of crude oil has already been shut down in the Gulf of Mexico as crews have been evacuated. In other news, New Zealand's dollar fell as a flare-up of COVID-19 cases in Auckland fuel speculation that the Reserve Bank may ease policy. On the economic front, the Chicago National Activity Index reported a value of 1.18 for the month of July. This comes in contrast  to the prior monthly value of 5.33, showcasing an economy that is still expanding, however at a slower pace. Reporting tomorrow are the Conference Board of Consumer Confidence for the month of July and New Home Sales for the month of June, both of which are expected to slightly beat prior monthly values. Among other notable events happening this week are the Republican National Convention which will be declaring President Donald Trump as the Republican nominee, and the yearly Fed symposium which will be led by Jerome Powell on the subject of "Navigating the Decade Ahead: Implications for Monetary Policy."

The curve has bull-flattened with UST 10-Year yield down 0.48 bp.
This Week's Events
  08/24 Chicago Fed Nat Activity Index 05:30 Jul 3.70 1.18 4.11 5.33  
  08/25 FHFA House Price Index MoM 06:00 Jun 0.30% - -0.30% -  
  08/25 S&P CoreLogic CS 20-City MoM SA 06:00 Jun 0.10% - 0.04% -  
  08/25 S&P CoreLogic CS 20-City YoY NSA 06:00 Jun 3.60% - 3.69% -  
  08/25 Conf. Board Consumer Confidence 07:00 Aug 93.00 - 92.60 -  
  08/26 Durable Goods Orders 05:30 Jul P 4.50% - 7.60% -  
  08/26 Durables Ex Transportation 05:30 Jul P 2.00% - 3.60% -  
  08/27 GDP Annualized QoQ 05:30 2Q S -32.50% - -32.90% -  
  08/27 Personal Consumption 05:30 2Q S -34.60% - -34.60% -  
  08/27 GDP Price Index 05:30 2Q S -1.80% - -1.80% -  
  08/27 Core PCE QoQ 05:30 2Q S -1.10% - -1.10% -  
  08/27 Initial Jobless Claims 05:30 22 Aug 1000k - 1106k -  
  08/27 Continuing Claims 05:30 15 Aug 14450k - 14844k -  
  08/27 Bloomberg Consumer Comfort 06:45 23 Aug - - 43.50 -  
  08/28 Personal Income 05:30 Jul -0.30% - -1.10% -  
  08/28 Personal Spending 05:30 Jul 1.50% - 5.60% -  
  08/28 PCE Deflator MoM 05:30 Jul 0.40% - 0.40% -  
  08/28 PCE Deflator YoY 05:30 Jul 1.20% - 0.90% -  
  08/28 U. of Mich. Sentiment 07:00 Aug F 72.80 - 72.80 -
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