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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-14.5 (-02)  
  FN 2.5% Coupon   105-00 (-00.5)  
  Support   1.942%  
  Resistance   0.619%  
  Tuesday, September 15, 2020

Treasury Yields Increase as Tech Sector Rallies

Market opened today’s session with treasuries lower across all maturities. 10-Year Treasury yield is at 0.6838, 1.15 bps increased from prior closing of 0.6723.

Market opened with Nasdaq at its peak after suffering through its worst week since March. Data suggests global economic recovery is gaining traction, with US tech shares gaining the most, led by communication, utilities, and information technology. Notable early gainers include Tesla inc, Apple Inc. and Nividia Corp. Traders continue to monitor the Federal Reserve's policy meeting on Wednesday with expectations set at the Fed maintaining a dovish stance, even after previously reporting it will shift towards a more relaxed approach on inflation. In global news, Hennes Mauritz AB spearheaded a rally among fashion retailers in European markets following a beat in profits. Elsewhere, the Yuan climbed to the highest level in a year as Shanghai stocks rose on the back of evidence China is advancing out of the virus slump. The Australian dollar advanced following the Australian central bank's latest minutes indicating it did not plan to ease further. On the economic front, Empire State Manufacturing Index strongly outperformed expectations of 6.90 after reporting a value of 17.00 for the month of September. Key takeaway from today's report is that while firms expressed optimism in September, unless more aid or a pick up in revenues takes place, many businesses will be left to close their doors. Additionally Industrial Production failed to beat expectations after reporting at 0.40% for the month of August. With manufacturing production rising less than the prior month, today's report showcases a more moderate recovery for factories.

The curve has bear-steepened with UST 10-Year yield up 1.15 bps.
This Week's Events
  09/15 Empire Manufacturing 05:30 Sep 6.90 17.00 3.70 -  
  09/15 Import Price Index MoM 05:30 Aug 0.50% 0.90% 0.70% 1.20%  
  09/15 Import Price Index YoY 05:30 Aug -2.10% -1.40% -3.30% -2.80%  
  09/16 MBA Mortgage Applications 04:00 11 Sep - - 2.90% -  
  09/17 Housing Starts 05:30 Aug 1485k - 1496k 1483k  
  09/17 Housing Starts MoM 05:30 Aug -0.70% - 22.60% -  
  09/17 Building Permits 05:30 Aug 1517k - 1495k 1483k  
  09/17 Building Permits MoM 05:30 Aug 2.30% - 18.80% 17.90%  
  09/17 Initial Jobless Claims 05:30 12 Sep 850k - 884k -  
  09/17 Continuing Claims 05:30 5 Sep 13000k - 13385k -  
  09/17 Bloomberg Consumer Comfort 06:45 13 Sep - - 47.80 -  
  09/18 Leading Index 07:00 Aug 1.30% - 1.40% -  
  09/18 U. of Mich. Sentiment 07:00 Sep P 75.00 - 74.10 -
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