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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-13 (-05.5)  
  FN 2.5% Coupon   105-01.5 (+02.5)  
  Support   0.791%  
  Resistance   0.615%  
  Thursday, December 17, 2020

Treasury Yields Fall on Revamped Stimulus Hopes

Market opened today's session with treasuries higher across all maturities. 10-Year Treasury yield is at 0.9031, 1.32 bps decreased from prior closing of 0.9163.

US stocks opened higher this morning as hopes for further stimulus grew on underwhelming labor market data. While the US pushes for a $900 billion stimulus package, Europe passed a $2.2 trillion stimulus package on Wednesday. The pound rose to its highest level since April 2018 as officials hinted at the possibility of  a Brexit deal. Elsewhere, Bitcoin surpassed $23,000, meanwhile WTI Crude and Gold both rose by 0.8% and 0.9%, respectively. On the economic front, Initial Jobless Claims rose more than expected at 885K for the week ending December 12. In addition to reporting at the highest level in three months, today's figure aligns with an increase of 4.8 million claims for Pandemic Emergency Unemployment Compensation which grants aid to those who have exhausted state aid benefits, which is also set to expire this month. On the other hand, Housing Starts for the month of November exceeded expectations after reporting at 1.547mm for the month of November. Driven by record low interest rates, single family housing starts rose by 29.10% while multifamily starts fell by 16.10%, all within the month of November. Reporting tomorrow is the Leading Index, with expectations set at an increase of 0.50%.

The curve has bull-flattened with UST 10-Year yield down 1.32 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 - 1.10% -1.20% -  
  12/16 Markit US Manufacturing PMI 06:45 Dec P 55.80 56.50 56.70 -  
  12/16 Markit US Services PMI 06:45 Dec P 55.90 55.30 58.40 -  
  12/16 Markit US Composite PMI 06:45 Dec P - 55.70 58.60 -  
  12/17 Building Permits 05:30 Nov 1560k 1639k 1545k 1544k  
  12/17 Building Permits MoM 05:30 Nov 1.00% 6.20% 0.00% -0.10%  
  12/17 Housing Starts 05:30 Nov 1535k 1547k 1530k 1528k  
  12/17 Housing Starts MoM 05:30 Nov 0.30% 1.20% 4.90% 6.30%  
  12/17 Initial Jobless Claims 05:30 12 Dec 818k 885k 853k 862k  
  12/17 Continuing Claims 05:30 5 Dec 5700k 5508k 5757k 5781k  
  12/17 Bloomberg Consumer Comfort 06:45 13 Dec - 48.40 49.00 -  
  12/18 Leading Index 07:00 Nov 0.50% - 0.70% -
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