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Market Commentary

Market Commentary


Today's Coupons
  10-Year Notes   98-19 (-01)  
  FN 3.5% Coupon   102-22.5 (00)  
  Support   2.808%  
  Resistance   1.697%  





  Thursday, December 26, 2019

Treasury Yields Drift as Year-End Rally Continues in Stocks

Market opened today’s session with treasuries nearly unchanged across all maturities. 10-Year Treasury yield is at 1.8997, 0.01 bp increased from prior closing of 1.8996.

US equity index futures ticked higher this morning as the year-end rally continued with investors looking ahead for a promised trade breakthrough between the US and China. The S&P 500 has risen 28.60% YoY, marking only one percentage point below from the best annual performance since 1997. However, trading volumes are expected to be thin this week because of the holidays. In China, the overnight repo rate fell to the lowest level since 2009 due to the recent liquidity injections by its central bank. Elsewhere, WTI crude held around $61 a barrel this morning. In the economic calendar, MBA mortgage applications index fell 5.30% after falling 5.00% in prior week. Both purchases and refinances declined 4.80% and 5.10% after falling 2.10% and 6.50% in prior week, respectively.  Initial Jobless Claims came in slightly above consensus of 220k but declined from upwardly revised prior of 235k to 222k. Continuing Claims also printed 1719k, above consensus of 1688k. Lastly, Bloomberg Consumer Comfort climbed to 62.30 from prior reading of 61.10. Later today, the US Treasury is scheduled to auction off $35 billion of 4-week bills and $35 billion of 8-week bills at 8:30 AM (PT), and $32 billion of 7-year notes at 10:00 AM (PT).

The curve has bear-flattened with the UST 10-Year yield up 0.01 bp.
This Week's Events
  12/23 Chicago Fed Nat Activity Index 05:30 Nov -0.33 0.56 -0.71 -0.76  
  12/23 Durable Goods Orders 05:30 Nov P 1.50% -2.00% 0.50% 0.20%  
  12/23 Durables Ex Transportation 05:30 Nov P 0.20% 0.00% 0.50% 0.30%  
  12/24 Richmond Fed Manufact. Index 07:00 Dec 1.00 -5.00 -1.00 -  
  12/25 No Data - - - - - -  
  12/26 MBA Mortgage Applications 04:00 20 Dec - -5.30% -5.00% -  
  12/26 Initial Jobless Claims 05:30 21 Dec 220k 222k 234k 235k  
  12/26 Continuing Claims 05:30 14 Dec 1688k 1719k 1722k 1725k  
  12/26 Bloomberg Consumer Comfort 06:45 22 Dec - 62.30 61.10 -  
  12/27 No Data - - - - - -
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