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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   98-00 (+08)  
  FN 2.5% Coupon   104-02.5 (-03.5)  
  Support   0.747%  
  Resistance   0.599%  
  Friday, October 23, 2020

Treasury Yields Rise as Tech Shares Falter

Market opened today's session with treasuries lower across all maturities. 10-Year Treasury yield is at 0.8699, 1.37 bps increased from prior closing of 0.8562.
US stocks opened higher this morning as the financial sector accounted for most of the gains. Notable laggards include Intel Inc. which plunged over 10% after reporting its Data Center Group's Enterprise and Government business shrank by 47% when compared to a year ago. With Covid-19 continuing to threaten economies around the world, the FDA has approved antiviral therapy remdesivir as a treatment against the virus. Shares in Gilead Science Inc, manufacturer of remdesivir, rose on the news. In the US, economic stimulus talks continue to stagnate with no expected end in sight. And in Europe, equities jumped to their highest level in the past two weeks. Barclays Plc reported an improvement in trading, lifting the UK banking shares higher. The auto sector also saw gains as Daimler AG raised its profit forecast and Renault SA was able to meet its revenue estimates. On the economic front, US Manufacturing PMI showed a slight increase from 53.20 to 53.30, meanwhile US Services PMI increased from 54.60 to 56.00. Together, today's PMI readings paint a strong picture for the American economy as business expectations reached their highest point since February 2019. Elsewhere, the dollar and the pound dropped by 0.2% and 0.1%, respectively. The Japanese yen strengthened by 0.1%. Crude oil rose to $40.73 per barrel with a 0.2% increase as natural gas fell by 2.7%. Gold increased by 0.4% but Iron ore dropped by 3.1%.
The curve has bear-flattened with UST 10-Year yield up 1.37 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 56.00 54.60 -  
  10/23 Markit US Composite PMI 06:45 Oct P - 55.50 54.30 -
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