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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   1.627%  
  Support   1.593%  
  Resistance   1.351%  
  FN 2.5% Coupon   102.203 (+0.047)  
     Wednesday, November 17, 2021

U.S. Markets Quiet as Inflation Keeps Traders on Edge


The Market opened today's session with treasuries lower across all maturities. The 10-year Treasury yield is currently at 1.6353, 0.18 bps higher than prior closing of 1.6335.

Despite all the concern about inflation and monetary policy, U.S. equity futures are having a relatively subdued session. Contracts on the Nasdaq 100 and S&P 500 were little changed. The 10-year Treasury yield held above 1.60% as the case for tighter monetary policy keeps bond rates elevated. Housing starts disappointed expectations in October, down 0.70% MoM as single family starts dropped another 3.90%. Single-family starts were down 23.00% from January's peak.  Multi-family starts, however, were up 7.10% in October. Building permits for the month beat expectations, rising 4.00% MoM. Volatility broke through the currency markets, where the cost of hedging against volatility in the euro against the dollar over the next month climbed the most since the pandemic struck. MBA Mortgage Applications for the week were released earlier this morning, posting a 2.80% decrease. Refinances were down 5.10% (vs. 7.40% the week prior) while purchases increased 1.50% (vs. 2.70% the week prior). The NAHB's Housing Market Index rose unexpectedly in November. The 3-point gain to 83 marked a third monthly increase and matched the best level for the index since February. The improvement in home builder confidence reflected stronger current sales and an increase in the number of prospective buyers viewing properties. The Stoxx 600 Index inched higher, led by miners, while travel and leisure posted the biggest losses. Europe’s fourth virus wave simmered under the surface. Oil declined as investors weighed the odds that the Biden administration would tap emergency reserves in a coordinated move with nations such as China. Bitcoin steadied around the $60,000 level following a 5.00% selloff Tuesday.

The curve has bear-steepened with the UST 10-Year yield up 0.18 bps.

This Week's Events
  11/15 Empire Manufacturing 05:30 Nov 22.00 30.90 19.80 -  
  11/16 Import Price Index YoY 05:30 Oct 10.30% 10.70% 9.20% 9.30%  
  11/16 Capacity Utilization 06:15 Oct 75.90% 76.40% 75.20% -  
  11/17 MBA Mortgage Applications 04:00 12-Nov - -2.80% 5.50% -  
  11/17 Building Permits MoM 05:30 Oct 2.80% 4.00% -7.70% -7.80%  
  11/18 Initial Jobless Claims 05:30 13-Nov 260k - 267k -  
  11/18 Continuing Claims 05:30 6-Nov 2120k - 2160k -  
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