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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   97-30 (-07)  
  FN 2.5% Coupon   104-06 (-01.5)  
  Support   0.747%  
  Resistance   0.599%  
  Thursday, October 22, 2020

Treasuries turn slightly lower with positive Jobless Claim report

Market opened today's session with treasuries lower across all maturities. 10-Year Treasury yield is at 0.8428, 2.02 bps increased from prior closing of 0.8226.

Positive corporate earnings lead a tepid rise in U.S. Stocks this morning. Notable gainers include AT&T and Tesla, with AT&T on the rise after new wireless subscribers came in higher than expected, and Tesla reporting a fifth consecutive quarter of profits. U.S shares continue to face headwinds as talks on a new stimulus package are dragging the odds of an agreement being reached before the election. Markets are reacting to the lack of progress on a new stimulus, in addition to reports that Iran and Russia are attempting to interfere with the elections. Meanwhile, Covid-19 cases are resurging around the world, reaching record high infections in Germany while increasing in parts of Spain. In the US, hospitalizations have reached a two-month high.

On the economic front, Initial Jobless Claims for the week ending October 17 came in at 787,000, beating expectations and while still reporting lower than the revised prior value of 842,000. Continuing claims also fell to 8,373,000 from revised previous reporting of 9,397,000. The Markit US Manufacturing PMI report is still pending on this week’s economic calendar, and is scheduled to be released on Friday.

The curve has bear-steepened with UST 10-Year yield up 2.02 bps.
This Week's Events
  10/20 Building Permits 05:30 Sep 1520k 1553k 1470k 1476k  
  10/20 Building Permits MoM 05:30 Sep 3.00% 5.20% -0.90% -0.50%  
  10/20 Housing Starts 05:30 Sep 1465k 1415k 1416k 1388k  
  10/20 Housing Starts MoM 05:30 Sep 3.50% 1.90% -5.10% -6.70%  
  10/21 MBA Mortgage Applications 04:00 16 Oct - -0.60% -0.70% -  
  10/22 Initial Jobless Claims 05:30 17 Oct 870k 787k 898k 842k  
  10/22 Continuing Claims 05:30 10 Oct 9625k 8373k 10018k 9397k  
  10/22 Bloomberg Consumer Comfort 06:45 18 Oct - 46.60 48.20 -  
  10/22 Leading Index 07:00 Sep 0.60% 0.70% 1.20% 1.40%  
  10/23 Markit US Services PMI 06:45 Oct P 54.60 - 54.60 -  
  10/23 Markit US Composite PMI 06:45 Oct P - - 54.30 -
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