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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-31 (+10)  
  FN 2.5% Coupon   104-18.5 (+05)  
  Support   0.787%  
  Resistance   0.614%  
  Tuesday, November 17, 2020

Treasury Yields Fall As COVID Cases Return To Focus

Market opened today's session with treasuries higher across all maturities. 10-Year Treasury yield is at 0.8766, 2.95 bps decreased from prior closing of 0.9061.

US Stocks retraced Monday's gains as virus cases surged and restrictions gained steam. The energy sector dragged on the S&P 500 early while Tesla Inc. saw shares rise following an announcement that the company would be joining the index. In regards to the pandemic, COVID cases continue to spread rapidly in the US and Europe, meanwhile wide-spread distribution of a vaccine, such as the one reported yesterday by Moderna, remain months away. Elsewhere, WTI crude fell by 1% to $40.93 a barrel while Gold declined by 0.1%. On the economic front, Retail Sales MoM failed to meet expectations after reporting a 0.30% increase for the month of October. Ongoing pressure from a lack of additional fiscal aid, rising COVID cases, and potential restrictions due to the pandemic has Q4 poised to bear the brunt force of a further pandemic slowdown within the retail sector. Additionally, Industrial Production MoM rose by 1.10% in the month of October. With the most notable headwind coming from possible plant closures in those states most impacted by the pandemic, industrial production as a whole continues to be on solid footing thanks to stable demand in bigger-item goods and an increasing inventory shortage. Reporting tomorrow are MBA Mortgage Applications and Housing Starts, with the latter expected at 1.46mm for the month of October.

The curve has bull-flattened with UST 10-Year yield down 2.95 bps.
This Week's Events
  11/16 Empire Manufacturing 05:30 Nov 13.50 6.30 10.50 -  
  11/17 Import Price Index MoM 05:30 Oct 0.00% -0.10% 0.30% 0.20%  
  11/17 Import Price Index YoY 05:30 Oct -0.80% -1.00% -1.10% -1.40%  
  11/18 MBA Mortgage Applications 04:00 13 Nov - - -0.50% -  
  11/18 Building Permits 05:30 Oct 1568k - 1553k 1545k  
  11/18 Building Permits MoM 05:30 Oct 1.50% - 5.20% 4.70%  
  11/18 Housing Starts 05:30 Oct 1460k - 1415k -  
  11/18 Housing Starts MoM 05:30 Oct 3.20% - 1.90% -  
  11/19 Initial Jobless Claims 05:30 14 Nov 700k - 709k -  
  11/19 Continuing Claims 05:30 7 Nov 6420k - 6786k -  
  11/19 Bloomberg Consumer Comfort 06:45 15 Nov - - 48.00 -  
  11/19 Leading Index 07:00 Oct 0.70% - 0.70% -
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