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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-04 (-17)  
  FN 2.5% Coupon   104-25.5 (-02)  
  Support   0.797%  
  Resistance   0.618%  
  Friday, December 04, 2020

Treasury Yields Rise as Payrolls Underwhelm

Market opened today's session with treasuries lower across all maturities. 10-Year Treasury yield is at 0.9758, 6.95 bps increased from prior closing of 0.9063.
US stocks opened higher this morning as expectations for further stimulus rose. While all major indexes saw gains early morning, the US dollar fell, with the Bloomberg Dollar Spot Index falling to its lowest point in more than two years. Elsewhere, the Pentagon added four more Chinese-military backed companies to a list for potential sanctions in the US. WTI crude increased by 0.4% as OPEC+ agreed to ease output cuts at a more gradual pace next year. On the economic front, Change in Nonfarm Payrolls failed to meet expectations after reporting an additional 245K jobs in the month of November. With the most recent lockdown measures not accounted for in November's figure, December payrolls are expected to report even lower. The Unemployment Rate for the month of November met expectations after reporting at 6.70%. While the Unemployment Rate inched downwards, an increased number of workers left the workforce all-together, with the labor force participation rate of prime-age men falling to 87.4%, the lowest point since May. The US Trade Balance of Goods and Services advanced to -$63.10bb, a slight increase from the previously reported Trade Balance of -$62.10bb. Elsewhere, Durable Goods Orders remained unchanged at 1.30% while Factory Orders decreased slightly to 1.00%. Reporting next week are CPI MoM and Initial Jobless Claims on Thursday and PPI Final Demand MoM on Friday.
The curve has bear-steepened with UST 10-Year yield up 6.95 bps.
This Week's Events
  11/30 Dallas Fed Manf. Activity 07:30 Nov 14.30 12.00 19.80 -  
  12/01 ISM Prices Paid 07:00 Nov 65.00 65.40 65.50 -  
  12/01 Construction Spending MoM 07:00 Oct 0.80% 1.30% 0.30% -0.50%  
  12/02 MBA Mortgage Applications 04:00 27 Nov - -0.60% 3.90% -  
  12/02 ADP Employment Change 05:15 Nov 440k 307k 365k 404k  
  12/03 Initial Jobless Claims 05:30 28 Nov 775k 712k 778k 787k  
  12/03 Continuing Claims 05:30 21 Nov 5800k 5520k 6071k 6089k  
  12/03 Bloomberg Consumer Comfort 06:45 29 Nov - 49.30 49.60 -  
  12/03 Markit US Services PMI 06:45 Nov F 57.50 58.40 57.70 -  
  12/03 Markit US Composite PMI 06:45 Nov F - 58.60 57.90 -  
  12/04 Change in Nonfarm Payrolls 05:30 Nov 460k 245k 638k 610k  
  12/04 Average Hourly Earnings MoM 05:30 Nov 0.10% 0.30% 0.10% -  
  12/04 Average Hourly Earnings YoY 05:30 Nov 4.20% 4.40% 4.50% 4.40%  
  12/04 Factory Orders 07:00 Oct 0.80% 1.00% 1.10% 1.30%  
  12/04 Durable Goods Orders 07:00 Oct F 1.30% 1.30% 1.30% -  
  12/04 Durables Ex Transportation 07:00 Oct F 1.30% 1.30% 1.30% -
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