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Market Commentary

Market Commentary


Today's Coupons
  10-Year Notes   99-05 (+04)  
  FN 2.5% Coupon   104-17 (+01)  
  Support   0.747%  
  Resistance   0.599%  
  Thursday, October 15, 2020

Treasury Yields Lower as Global COVID Cases Climb Higher

Market opened today's session with treasuries higher across all maturities. 10-year Treasury yield is at 0.7090, 1.66 bps decreased from prior closing of 0.7256.

US Stocks opened lower this morning as rising coronavirus cases around the globe resuscitated lock downs to curb the spread of infections. With commodity, industrial, and technology companies leading declines, notable positive outliers include Morgan Stanley and Walgreens Boots Alliance following a strong beat in Q4 earnings. In Europe, the UK and EU enter the final 24 hours of negotiations with officials expressing doubt on whether or not a deal will be reached with Prime Minister Boris Johnson. Elsewhere, WTI crude declined below $40 a barrel by 3.5%, meanwhile Gold fell by 0.3%. On the economic front, Initial Jobless Claims reported significantly higher than expected with 898,000 claims for week end October 10. With many Americans already exhausting  state aid and now relying on Pandemic Emergency Unemployment Compensation for an additional 13 weeks of jobless benefits, today's figure further highlights headwinds in the labor market. Notably, today's unemployment claims do not include figures from California as they continue to work on revising their internal processes. At the federal level, lawmakers continue to stalemate a new stimulus plan which would provide additional benefits following the expiration of the CARES act in July. Elsewhere, the Empire State Manufacturing Survey failed to meet expectations of 14.00 after reporting at 10.50 for the month of October, meanwhile the Philadelphia Fed survey jumped significantly from a prior reported figure of 15.00, reporting today at 32.30. Collectively today's manufacturing reports showcase a resilient goods sector, one benefiting from higher inventory drawdowns, longer workweeks, and increased new orders.

The curve has bull-flattened with UST 10-Year yield down 1.66 bps.

This Week's Events
  10/13 NFIB Small Business Optimism 03:00 Sep 100.90 104.00 100.20 -  
  10/13 CPI MoM 05:30 Sep 0.20% 0.20% 0.40% -  
  10/13 CPI YoY 05:30 Sep 1.40% 1.40% 1.30% -  
  10/13 CPI Index NSA 05:30 Sep 260.327 260.280 259.918 -  
  10/13 CPI Core Index SA 05:30 Sep 269.341 269.264 268.747 -  
  10/14 MBA Mortgage Applications 04:00 Oct 9 - -0.70% 4.60% -  
  10/14 PPI Final Demand MoM 05:30 Sep 0.20% 0.40% 0.30% -  
  10/14 PPI Final Demand YoY 05:30 Sep 0.20% 0.40% -0.20% -  
  10/15 Initial Jobless Claims 05:30 10 Oct 825k 898k 840k 845k  
  10/15 Continuing Claims 05:30 3 Oct 10550k 10018k 10976k 11183k  
  10/15 Bloomberg Consumer Comfort 06:45 11 Oct - 48.20 48.00 -  
  10/16 U. of Mich. Sentiment 07:00 Oct P 80.50 - 80.40 -
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