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Market Commentary

Market Commentary


Today's Coupons
  10-Year Notes   99-09 (-06.5)  
  FN 2.5% Coupon   104-27.5 (-01)  
  Support   0.747%  
  Resistance   0.599%  
  Friday, October 2, 2020

Treasury Yields Rise As President Donald Trump Tested Positive for COVID-19

Market opened today's session with treasuries slightly lower across all maturities. 10-Year Treasury yield is at 0.6890, 1.16 bps increased from prior closing of 0.6774.

US stocks fell this morning following news of President Donald Trump tested positive for COVID-19. In addition to the S&P 500 and Nasdaq dropping by more than 1% each, the CBOE Volatility Index, alternatively known as Wall Street's fear gauge, spiked overnight by more than 10%. In regard to the pandemic, New York and London reported large increases in new COVID cases with NY reporting the most since May. Hopes for a new stimulus package in the US continued to fade as Republicans rejected a Democrat-only bill passed by the House of Representatives as a response to pandemic-related fallout. Elsewhere, European stocks fell as the pound rose on news that Boris Johonson will intervene in Brexit negotiations. WTI crude continued to sink below $40 a barrel as Gold decreased by 0.1%, nearing $1,903.65 an ounce. On the economic front, US Non-farm Payrolls for the month of September failed to beat expectations after reporting at 661 thousand jobs added, a sharp decline from a prior addition of 1.371 million jobs. Being the last jobs report to come out before the November election, today's report points towards a slowing economy, one which continues to face hurdles in the form of a failed compromise on new government aid in the face of rising COVID cases. Progress towards a vaccine continues to be a core goal in seeking to boost the current economic state. Elsewhere the Unemployment Rate fell to a rate of 7.90%, however this figure came in conjunction to a decrease in the labor-force participation rate which declined to 61.40%. The decrease in labor-force was particularly pronounced among women, with an increasing number of parents leaving the workforce due to childcare obligations as students are forced to learn virtually from home.

The curve has bear-steepened with UST 10-Year yield up 1.16 bps.
This Week's Events
  09/28 Dallas Fed Manf. Activity 07:30 Sep 9.50 13.60 8.00 -  
  09/29 S&P CoreLogic CS 20-City MoM SA 06:00 Jul 0.10% 0.55% 0.00% -  
  09/29 S&P CoreLogic CS 20-City YoY NSA 06:00 Jul 3.60% 3.95% 3.46% -  
  09/29 Conf. Board Consumer Confidence 07:00 Sep 90.00 101.80 84.80 86.30  
  09/30 MBA Mortgage Applications  04:00 25 Sep - -4.80% 6.80%  -  
  09/30 GDP Annualized QoQ 05:30 2Q T -31.70% -31.40% -31.70% -  
  09/30 Personal Consumption 05:30 2Q T -34.10% -33.20% -34.10% -  
  09/30 GDP Price Index 05:30 2Q T -2.00% -1.80% -2.00% -  
  09/30 Core PCE QoQ 05:30 2Q T -1.00% -0.80% -1.00% -  
  10/01 Initial Jobless Claims 05:30 26 Sep 850k 837k 870k 873k  
  10/01 Continuing Claims 05:30 19 Sep 12200k 11767k 12580k 12747k  
  10/01 Personal Income 05:30 Aug -2.50% -2.70% 0.40% 0.50%  
  10/01 Personal Spending 05:30 Aug 0.80% 1.00% 1.90% 1.50%  
  10/01 PCE Deflator MoM 05:30 Aug 0.30% 0.30% 0.30% 0.40%  
  10/01 PCE Deflator YoY 05:30 Aug 1.20% 1.40% 1.00% 1.10%  
  10/01 Bloomberg Consumer Comfort 06:45 27 Sep - 49.30 49.80 -  
  10/02 Durable Goods Orders 07:00 Aug F 0.40% 0.50% 0.40% -  
  10/02 Durables Ex Transportation 07:00 Aug F 0.40% 0.60% 0.40% -  
  10/02 U. of Mich. Sentiment 07:00 Sep F 79.00 80.40 78.90 -
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