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Market Commentary

Market Commentary


Today's Coupons
  10-Year Notes   99-02.5 (-07)  
  FN 2.5% Coupon   105-04 (-01.5)  
  Support   1.94%  
  Resistance   0.62%  
  Thursday, September 10, 2020

Treasury Yields Rise as the Tech Sector Continues to Rebound

The market opened today’s session with Treasuries slightly lower across all maturities. 10-year Treasury yield is at 0.71, 0.82 bp increased from prior closing of 0.70.

US stocks opened higher this morning as tech shares continued to extend their rebound. The Euro added to gains after the central bank reinforced the idea that there is no reason to overreact to the currency's strength. Apple Inc. and Tesla Inc. rose in early market trading as Nasdaq 100 futures added 0.9%. Treasuries declined while gold advanced to $1,957 an ounce while the dollar weakened. Crude Oil declined 0.6% to $37.53 a barrel. BP Plc slipped after making its first venture into offshore wind power with a $1.1 billion purchase of US assets from Norway's Equinor ASA. Elsewhere, the Euro climbed 0.7% against the dollar. In President Christine Lagarde's press conference, the European Central Bank will adopt weaker phrasing about the Euro's recent appreciation than it did during previous bouts of currency gains. On the economic front, the labor market has stalled a bit as Initial Jobless Claims printed higher for the week end of September 5, coming in at 884k. The prior week’s 881k print was revised up to 884k as well. Continuing Claims increased to 13.4 million. With the states of California, Texas and Louisiana being affected the most, the jobs data shows a potential need for more stimulus as Washington policy makers fail to reach a consensus on a deal. In other news, Producer Prices increased more than forecast in August after increasing by 0.30% from a month earlier. While this figure signals producers are becoming slightly more successful in passing along higher raw material costs onto consumers, thus leading to an acceleration of Consumer Prices, the overall return to the Federal Reserve's 2% inflation target will still likely be a slow process. On Friday, the Labor Department will issue its August report on Consumer Prices, and the median forecast calls for a 1.20% year-over-year increase.

The curve has bear-steepened with UST 10-Year yield up 0.82 bp.

This Week's Events
  09/08 NFIB Small Business Optimism 03:00 Aug 99.00 100.20 98.80 -  
  09/09 MBA Mortgage Applications 04:00 4 Sep - 2.90% -2.00% -  
  09/09 JOLTS Job Openings 07:00 Jul 6000 6618 5889 6001  
  09/10 PPI Final Demand MoM 05:30 Aug 0.20% 0.30% 0.60% -  
  09/10 PPI Final Demand YoY 05:30 Aug -0.30% -0.20% -0.40% -  
  09/10 Initial Jobless Claims 05:30 5 Sep 850k 884k 881k 884k  
  09/10 Continuing Claims 05:30 29 Aug 12904k 13385k 13254k 13292k  
  09/10 Bloomberg Consumer Comfort 06:45 6 Sep - 47.80 45.10 -  
  09/11 CPI MoM 05:30 Aug 0.30% - 0.60% -  
  09/11 CPI YoY 05:30 Aug 1.20% - 1.00% -  
  09/11 CPI Index NSA 05:30 Aug 259.592 - 259.101 -  
  09/11 CPI Core Index SA 05:30 Aug 268.440 - 267.715 -  
  09/11 Monthly Budget Statement 11:00 Aug -$235.40B - -$200.30B -
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