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Market Commentary

Market Commentary


Today's Coupons
  10-Year Notes   98-10 (+11)  
  FN 2.5% Coupon   104-06 (+01.5)  
  Support   0.747%  
  Resistance   0.599%  
  Monday, October 26, 2020

Treasury Yields Fall as COVID Cases are on the Rise

Market opened today's session with treasuries higher across all maturities. 10-Year Treasury yield is at 0.8044, 3.85 bps decreased from prior closing of 0.8429.

With COVID-19 cases on the rise globally, US and European equities alike declined this morning. In the US, hopes for an economic stimulus package passing prior to elections continue to remain low, further aggravating forward looking market conditions. Elsewhere, energy and materials companies were amongst the biggest laggards in the S&P 500 as the index saw its single biggest decline in nearly a month. This came as the defense and aviation industry stands to suffer from China’s plan to sanction big-name companies such as Boeing Co, Lockheed Martin Corp, and Raytheon Technologies Corp. This response was triggered in retaliation to a $1.8 billion arms deal between the US and Taiwan. Coming up next Thursday, Q3 GDP is anticipated to report stronger than Q2, which faced the brunt effect of economic shutdowns as instigated by the pandemic.

On the economic front, new home sales fell in September but remain strong after reporting at 959K in comparison to a prior value of 1011K. Additionally, homebuilder optimism continues to remain high as the number of properties sold for which construction had yet to begin rose by 319K in September, signalling strong demand for months to come. Elsewhere, the euro, british pound and japanese yen all saw declines this morning. Crude Oil fell by 2% to $39.04 per barrel as gold approached $1,901.69 an ounce.

The curve has bull-flattened with UST 10-Year yield down 3.85 bps.
This Week's Events
  10/26 Chicago Fed Nat Activity Index 05:30 Sep 0.73 0.27 0.79 1.11  
  10/26 Dallas Fed Manf. Activity 07:30 Oct 13.50 19.80 13.60 -  
  10/27 Durable Goods Orders 05:30 Sep P 0.50% - 0.50% -  
  10/27 S&P CoreLogic CS 20-City MoM SA 06:00 Aug 0.50% - 0.55% -  
  10/27 S&P CoreLogic CS 20-City YoY NSA 06:00 Aug 4.20% - 3.95% -  
  10/27 Conf. Board Consumer Confidence 07:00 Oct 102.00 - 101.80 -  
  10/28 MBA Mortgage Applications  04:00 23 Oct - - -0.60%  -  
  10/29 Initial Jobless Claims 05:30 24 Oct 775k - 787k -  
  10/29 Continuing Claims 05:30 17 Oct 7700k - 8373k -  
  10/29 GDP Annualized QoQ 05:30 3Q A 32.00% - -31.40% -  
  10/29 GDP Price Index 05:30 3Q A 2.90% - -1.80% -  
  10/29 Bloomberg Consumer Comfort 06:45 25 Oct - - 46.60 -  
  10/30 PCE Deflator MoM 05:30 Sep 0.20% - 0.30% -  
  10/30 PCE Deflator YoY 05:30 Sep 1.50% - 1.40% -  
  10/30 U. of Mich. Sentiment 07:00 Oct F 81.20 - 81.20 -
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