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Market Commentary

Market Commentary


Today's Coupons
  10-Year Notes   99-05.5 (-07)  
  FN 2.5% Coupon   104-30 (00)  
  Support   1.942%  
  Resistance   0.505%  
  Wednesday, August 26, 2020

Treasury Yields Rise as Durable Good Orders Exceed Expectations

Market opened today’s session with treasuries edging lower across all maturities. 10-Year Treasury yield is at 0.7128, 2.93 bps increased from prior closing of 0.6835.

US stocks opened higher this morning as equities extended a record gains on the back of expectations for looser monetary policy. Notable gainers include Inc. as it reported a revenue beat, signaling that as the pandemic hit most clients responded by upgrading technology systems. Globally, Germany's stocks pulled European equities higher as the country extended a program that has kept millions of people from losing there jobs in the region's biggest economy. Shares fell in Shanghai and Sydney, capping the $53 trillion MSCI global gauge of equities at just below its all-time closing high. The dollar gained while crude oil traded near its most costly in five months as Hurricane Laura bore down on key refining facilities on the US Gulf Coast. In other news, as global economies reopen, investors continue focusing on vaccine progress while showing cautious optimism on controlling recent outbreaks. Traders continue awaiting Federal Reserve Chairman Jerome Powell's speech this coming Thursday which will be centered around the Fed's new inflation strategy. Elsewhere, soybean futures are set to climb to a seven month high following rumors China is set to buy a record amount from America this year. On the economic front, MBA mortgage applications fell 6.50% for the week of August 21. Within this change in applications, refi's fell 10.20%, as FHA purchases rose by 0.10%. The average 30-yr fixed rate stood at 3.11%. Durable Goods Orders significantly beat expectations of 4.80% after reporting orders increased by 11.20% for the month of July. The core driver comes from a surge in automobile demand, indicating factories will help support the economic rebound in coming months. Bookings for durable goods, or items meant to last at least three years increased by 11.20%, meanwhile core capital orders, which excludes aircraft and military hardware, increased by 1.90%. Reporting tomorrow are GDP Annualized QoQ and Initial Jobless Claims, both expected at -32.50% and 1 million respectively.

The curve has bear-steepened with UST 10-Year yield up 2.93 bps.
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% 0.90% -0.30% -0.20%  
  08/25 S&P CoreLogic CS 20-City MoM SA 06:00 Jun 0.10% 0.00% 0.04% -0.03%  
  08/25 S&P CoreLogic CS 20-City YoY NSA 06:00 Jun 3.60% 3.46% 3.69% 3.61%  
  08/25 Conf. Board Consumer Confidence 07:00 Aug 93.00 84.80 92.60 91.70  
  08/26 Durable Goods Orders 05:30 Jul P 4.80% 11.20% 7.60% 7.70%  
  08/26 Durables Ex Transportation 05:30 Jul P 2.00% 2.40% 3.60% 4.00%  
  08/27 GDP Annualized QoQ 05:30 2Q S -32.50% - -32.90% -  
  08/27 Personal Consumption 05:30 2Q S -34.20% - -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 14400k - 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 1.00% - 0.80% -  
  08/28 U. of Mich. Sentiment 07:00 Aug F 72.80 - 72.80 -
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