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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   98-21.5 (+04)  
  FN 2.5% Coupon   104-22.5 (-01.5)  
  Support   0.747%  
  Resistance   0.599%  
  Friday, October 9, 2020

Treasury Yields Fall as Stimulus Talks Are Revived

Market opened today's session with treasuries higher across all maturities. 10-Year Treasury yield is at 0.7604, 2.48 bps decreased from prior closing of 0.7852.

US stocks opened higher as the white house revived hopes for a large scale stimulus package. Following Tuesday's tweets by President Donald Trump, Treasury Secretary Steven Mnuchin has retraced Trump's initial threat to cancel negotiations until after his re-election, and expressed openness to a deal with House Speaker Nancy Pelosi. Elsewhere, chip maker Xilinx Inc. jumped following news it is in advanced talks on a potential buyout by rival Advanced Micro Devices. In New York, oil stands to post the highest weekly gain since June as Hurricane Delta forced facilities in the Gulf of Mexico to shut down up to 92% of crude oil output. Globally, European stocks rose as a host of companies raised their outlooks, in addition to which equities in Spain fell on news Madrid declared a state of emergency in order to manage the propagation of COVID-19 infections. WTI crude surpassed $41 a barrel as Gold strengthened by 1.3%. On the economic front, Wholesale Inventories reported slightly below expectations at 0.40% growth MoM. Notably, wholesale sales rose 1.40% in August after having risen by 4.80% in the month prior. Reporting next week is MoM CPI on Tuesday, and  Initial Jobless Claims on Thursday, both expected at 0.20% and 820,000, respectively.

The curve has bull-flattened with UST 10-Year yield down 2.48 bps.
This Week's Events
  10/05 Markit US Services PMI 06:45 Sep F 54.60 54.60 54.60 -  
  10/05 Markit US Composite PMI 06:45 Sep F - 54.30 54.40 -  
  10/06 Trade Balance 05:30 Aug -$66.20b -$67.10b -$63.60b -$63.40b  
  10/06 JOLTS Job Openings 07:00 Aug 6500 6493 6618 6697  
  10/07 MBA Mortgage Applications 04:00 2 Oct - 4.60% -4.80% -  
  10/08 Initial Jobless Claims 05:30 3 Oct 820k 840k 837k 849k  
  10/08 Continuing Claims 05:30 26 Sep 11400k 10976k 11767k 11979k  
  10/08 Bloomberg Consumer Comfort 06:45 4 Oct - 48.00 49.30 -  
  10/09 Wholesale Inventories MoM 07:00 Aug F 0.50% 0.40% 0.50% -
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