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Market Commentary



 
Today's Coupons
 
  10-Year Notes   100-13.5 (+02)  
 
  FN 2.5% Coupon   104-18 (+02)  
 
  Support   2.065%  
 
  Resistance   0.559%  
 
 
 
 
  Monday, July 27, 2020
 
 

Treasury Yields Fall as Durable Goods Beat Expectations

 
 
Market opened today’s session with treasuries slightly edging higher across all maturities. 10-Year Treasury yield is at 0.5839, 0.49 bp decreased from prior closing of 0.5888.

Stocks opened higher today with gold setting a new all time high as it neared $1,940 per ounce, it's biggest increase since April, a stark contrast to the dollar which sank to its lowest level since September 2018. Notable market movers include Moderna Inc. which soared on second round funding for an experimental vaccine for COVID-19, meanwhile Under Armour Inc. sank as a pair of top executives were named in a federal probe regarding the company's accounting. Global setbacks in the fight against coronavirus are expected to push Jerome Powell towards maintaining rates near zero. On the economic front, durable good orders came in at 7.30%, beating expectations of 6.90%, however still notably less than the 15.70% rate reported in May. Durables excluding transportation failed to beat expectations of 3.60% by 0.30%, a slight decline from the prior months rate of 3.70%. Although orders are still significantly below pre-pandemic levels, spending on goods has exhibited a V-shaped recovery, unlike it's servicing counterpart, as a spike in demand for motor vehicles along with a pickup in business activity contribute to growth. In other news, capital goods rose by 3.30% after a 1.60% increase in May, mostly driven by demand for vehicles, which grew by 85.70% MoM. Later this week, the conference board for consumer confidence is expected to decrease by 3.4 bps on July 28 at 07:00 AM (PT). MBA mortgage applications and wholesale inventories will both be reported on July 29, at 04:00 AM (PT), and 05:30 AM (PT) respectively.

The curve has bull-flattened with UST 10-Year yield down 0.49 bp.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  07/27 Durable Goods Orders 05:30 Jun P 6.90% 7.30% 15.70% 15.10%  
                   
  07/27 Durables Ex Transportation 05:30 Jun P 3.60% 3.30% 3.70% 3.60%  
                   
  07/27 Dallas Fed Manf. Activity 07:30 Jul -4.80 -3.00 -6.10 -  
                   
  07/28 S&P CoreLogic CS 20-City MoM SA 06:00 May 0.30% - 0.33% -  
                   
  07/28 S&P CoreLogic CS 20-City YoY NSA 06:00 May 4.10% - 3.98% -  
                   
  07/28 Richmond Fed Manufact. Index 07:00 Jul 5.00 - 0.00 -  
                   
  07/29 MBA Mortgage Applications 04:00 24 Jul - - 4.10% -  
                   
  07/30 GDP Annualized QoQ 05:30 2Q A -35.00% - -5.00% -  
                   
  07/30 Personal Consumption 05:30 2Q A -34.50% - -6.80% -  
                   
  07/30 GDP Price Index 05:30 2Q A -0.10% - 1.40% -  
                   
  07/30 Core PCE QoQ 05:30 2Q A -0.90% - 1.70% -  
                   
  07/30 Initial Jobless Claims 05:30 25 Jul 1430k - 1416k -  
                   
  07/30 Continuing Claims 05:30 18 Jul 16300k - 16197k -  
                   
  07/30 Bloomberg Consumer Comfort 06:45 26 Jul - - 44.70 -  
                   
  07/31 Personal Income 05:30 Jun -0.70% - -4.20% -  
                   
  07/31 Personal Spending 05:30 Jun 5.20% - 8.20% -  
                   
  07/31 PCE Deflator MoM 05:30 Jun 0.40% - 0.10% -  
                   
  07/31 PCE Deflator YoY 05:30 Jun 0.90% - 0.50% -  
                   
  07/31 U. of Mich. Sentiment 07:00 Jul F 72.80 - 73.20 -
                   
 
 
 
 
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