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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-23 (-02)  
  FN 2.5% Coupon   104-30 (+01)  
  Support   0.791%  
  Resistance   0.615%  
  Tuesday, December 15, 2020

Treasury Yields Rise as Vaccine Roll-out Drives Markets

Market opened today's session with treasuries lower across all maturities. 10-Year Treasury yield is at 0.9047, 1.16 bps increased from prior closing of 0.8931.

US Stocks opened higher as the Federal Reserve began its two-day meeting today. Notable gainers include Bristol-Myers Squibb Co. following a buy recommendation by Goldman Sachs Group. In Europe, the pound rose as Brexit trade talks continued to take an optimistic stance. Elsewhere, WTI Crude and Gold both rose by 0.50% and 1.10%, respectively. On the economic front, Empire Manufacturing failed to beat expectations after reporting at 4.90 for the month of December. Reporting at the weakest level since August, short-term headwinds continue to be centered around COVID cases, however forward outlook continues to be upbeat, with a successful vaccine rollout being critical in increasing manufacturing performance. Industrial Production MoM, while still lower than reported in the prior period, still slightly beat expectations after reporting an increase of 0.40% for the month of November. Notably production of motor parts and vehicles increased by 5.30% in the reported month, however, even with the improvement manufacturing continues to be 3.60% below its February level. Reporting tomorrow are MBA Mortgage Applications and US Manufacturing PMI, with the latter expected at 55.80.

The curve has bear-steepened with UST 10-Year yield up 1.16 bps.
This Week's Events
  12/15 Empire Manufacturing 05:30 Dec 6.30 4.90 6.30 -  
  12/15 Import Price Index MoM 05:30 Nov 0.30% 0.10% -0.10% -  
  12/15 Import Price Index YoY 05:30 Nov -0.90% -1.00% -1.00% -  
  12/16 MBA Mortgage Applications 04:00 11 Dec - - -1.20% -  
  12/16 Markit US Manufacturing PMI 06:45 Dec P 55.80 - 56.70 -  
  12/16 Markit US Services PMI 06:45 Dec P 55.90 - 58.40 -  
  12/16 Markit US Composite PMI 06:45 Dec P - - 58.60 -  
  12/17 Building Permits 05:30 Nov 1560k - 1545k 1544k  
  12/17 Building Permits MoM 05:30 Nov 1.00% - 0.00% -0.10%  
  12/17 Housing Starts 05:30 Nov 1535k - 1530k -  
  12/17 Housing Starts MoM 05:30 Nov 0.30% - 4.90% -  
  12/17 Initial Jobless Claims 05:30 12 Dec 815k - 853k -  
  12/17 Continuing Claims 05:30 5 Dec 5700k - 5757k -  
  12/17 Bloomberg Consumer Comfort 06:45 13 Dec - - 49.00 -  
  12/18 Leading Index 07:00 Nov 0.50% - 0.70% -
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