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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-12.5 (-01.5)  
  FN 2.5% Coupon   105-05 (+02.5)  
  Support   0.791%  
  Resistance   0.615%  
  Friday, December 18, 2020

Treasury Yields Rise as Congress Continues Stimulus Talks

Market opened today's session with treasuries slightly lower across all maturities. 10-Year Treasury yield is at 0.9363, 0.34 bp increased from prior closing of 0.9329.

US stocks opened higher this morning as volatility will be expected higher than usual today thanks to the joint expiration of derivative contracts for equities and indexes alike. In Washington, bureaucrats continue to struggle in reaching an agreement over new stimulus funding. Additionally, the US Commerce Department has blacklisted Semiconductor Manufacturing International Corp. along with sixty other chinese companies in the best interest of national security. Elsewhere, copper surpassed $8,000 a ton for the first time in seven years, thanks to supply bottlenecks and higher demand. WTI Crude and Gold both rose by 0.2% and 0.1%, respectively. On the economic front, the leading index slightly surpassed expectations after reporting an increase of 0.60% for the month of November. Notably, the biggest index contributor came from jobless claims at 0.20, while the strongest laggard came from consumer expectations at -0.09. Reporting next week on Tuesday is Annualized GDP QoQ and Existing home sales, both expected at 33.10% and 6.7mm, respectively.

The curve has bear-steepened with UST 10-Year yield up 0.34 bp.
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% 0.60% 0.70% 0.80%
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