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Market Commentary


 
 
Today's Coupons
 
  10-Year Notes   99-01.5 (-29.5)  
 
  FN 3.5% Coupon   105-13.5 (00)  
 
  Support   2.266%  
 
  Resistance   0.583%  
 
 
 
 
  Tuesday, May 26, 2020
 
 

Treasury Yields Rise as Stocks Surge on Economy Reopening

 
 
Market opened today’s session with treasuries selling off across all maturities. 10-Year Treasury yield is at 0.690, 3.09 bps increased from prior closing of 0.6591.

Stocks jumped this morning, pushing the S&P 500 above 3,000 for the first time since March 5th as investors favored risk assets on optimism that the worst of the economic blow from the pandemic has passed. Airlines, hotel/resorts and cruise shares were the biggest gainers this morning from the economy reopening. Also, on a bright side, another American biotech company Novavax said it had started the first human study of its experimental coronavirus vaccine. There are 10 vaccines in clinical evaluation and 114 in pre-clinical evaluation so far. In the economic calendar today, Conference Board Consumer Confidence in May rose to 86.60 from a downwardly revised prior of 85.70 and New Homes Sales in April topped the estimate of 480k at 623k, reinforcing the belief that the economy had already hit the bottom. FHFA House Price index in March lowered to 0.1% from an upwardly revised prior of 0.8% vs. 0.5% consensus and lastly, Dallas Fed Manufacturing Activity in May improved to -49.20 from prior reading of -73.70 vs. -61.00 consensus. Both Treasuries and the dollar sold off with mortgages outperforming the Treasuries. Elsewhere, WTI crude advanced above $34 a barrel on hopes that the market may rebalance after the current production cuts.

The curve has bear-steepened with UST 10-Year yield up 3.09 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  05/26 Chicago Fed Nat Activity Index 05:30 Apr -3.50 -16.74 -4.19 -4.97  
                   
  05/26 FHFA House Price Index MoM 06:00 Mar 0.50% 0.10% 0.70% 0.80%  
                   
  05/26 S&P CoreLogic CS 20-City MoM SA 06:00 Mar 0.30% 0.47% 0.45% 0.52%  
                   
  05/26 S&P CoreLogic CS 20-City YoY NSA 06:00 Mar 3.44% 3.92% 3.47% 3.52%  
                   
  05/26 Dallas Fed Manf. Activity 07:30 May -61.00 -49.20 -73.70 -  
                   
  05/27 MBA Mortgage Applications 04:00 22 May - - 2.60% -  
                   
  05/27 Richmond Fed Manufact. Index 07:00 May -40.00 - -53.00 -  
                   
  05/28 GDP Annualized QoQ 05:30 1Q S -4.80% - -4.80% -  
                   
  05/28 Personal Consumption 05:30 1Q S -7.50% - -7.60% -  
                   
  05/28 GDP Price Index 05:30 1Q S 1.30% - 1.30% -  
                   
  05/28 Core PCE QoQ 05:30 1Q S 1.80% - 1.80% -  
                   
  05/28 Durable Goods Orders 05:30 Apr P -20.00% - -14.70% -  
                   
  05/28 Durables Ex Transportation 05:30 Apr P -15.00% - -0.40% -  
                   
  05/28 Initial Jobless Claims 05:30 23 May 2100k - 2438k -  
                   
  05/28 Continuing Claims 05:30 16 May 25750k - 25073k -  
                   
  05/28 Bloomberg Consumer Comfort 06:45 24 May - - 34.70 -  
                   
  05/29 PCE Core Deflator MoM 05:30 Apr -0.30% - -0.10% -  
                   
  05/29 Personal Income 05:30 Apr -6.50% - -2.00% -  
                   
  05/29 Personal Spending 05:30 Apr -13.00% - -7.50% -  
                   
  05/29 PCE Deflator MoM 05:30 Apr -0.60% - -0.30% -  
                   
  05/29 PCE Deflator YoY 05:30 Apr 1.10% - 1.70% -  
                   
  05/29 U. of Mich. Sentiment 07:00 May F 74.00 - 73.70 -
                   
 
 
 
 
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