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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   98-16.5 (+06)  
  FN 2.5% Coupon   104-06.5 (00)  
  Support   0.747%  
  Resistance   0.599%  
  Tuesday, October 27, 2020

Treasury Yields Fall Amid Market Volatility

Market opened today's session with treasuries higher across all maturities. 10-Year Treasury yield is at 0.7776, 2.34 bps decreased from prior closing of 0.8010.

Strong corporate earnings had U.S equity futures rising and European stocks leveling off this morning. Tech shares pushed higher following an announcement from Advanced Micro Devices, stating a $35 billion takeover of Xilinx Inc. Elsewhere, Merck and Co saw shares gain after reporting a strong profit forecast. The S&P 500 continued to struggle after suffering its biggest loss in a month on Monday. A strong dividend outlook had the Stoxx Europe 600 recovering from an earlier decline, which had originally been triggered over increasing COVID - 19 infection concerns. In the US, stocks followed a volatile trajectory as the possibilities of a new stimulus package before November 3rd appear unlikely. The expectation is for the market to remain volatile for the rest of the year as rising Covid cases and hospitalization constraints could lead to stricter movement measures being put in place.

Elsewhere, Bitcoin rose toward $13,500 while crude oil edged higher. Negotiations between the United Kingdom and the E.U. are intensifying as they look to finalize a deal for Brexit by mid-November. In economic news, Durable Goods Orders were released today. Results were higher than expected at 1.90%, indicative of a strengthening manufacturing sector. Orders for civilian aircrafts and parts continue to lag as the industry continues to struggle after bookings all but evaporated with COVID restrictions on air travel. Conference Board Consumer Confidence failed to meet expectations, reporting at 100.90, lower than the revised prior of 101.30. Tomorrow MBA Mortgage Applications Reports and Wholesale Inventories MoM will be released.

The curve has bull-flattened with UST 10-Year yield down 2.34 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% 1.90% 0.50% 0.40%  
  10/27 S&P CoreLogic CS 20-City MoM SA 06:00 Aug 0.50% 0.47% 0.55% 0.75%  
  10/27 S&P CoreLogic CS 20-City YoY NSA 06:00 Aug 4.20% 5.18% 3.95% 4.12%  
  10/27 Conf. Board Consumer Confidence 07:00 Oct 102.00 100.90 101.80 101.30  
  10/28 MBA Mortgage Applications  04:00 23 Oct - - -0.60%  -  
  10/29 Initial Jobless Claims 05:30 24 Oct 773k - 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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