Daily Market Color April 20, 2021Benchmark 10-Year Falls to 5-Week Low 10-year Treasury yield falls to lowest level in 5 weeks While expectations of inflation remain strong, Treasury yields and swap rates fell 1-5 bps on the day – the 10-year UST yield closed 4 bps lower to 1.55%. Despite a strong start to corporate earnings season, rising virus cases pulled equity indices lower – the S&P 500 and DJIA fell 0.7% and 0.8%, respectively. Biden administration open to a smaller corporate tax hike To help finance the Biden administration’s infrastructure deal, the White House proposed raising the corporate tax from 21% to 28%. Some Republican Congress members disapprove of the large tax increase and have proposed between a 2-3% increase. In response, President Biden said, “I am prepared to compromise, prepared to see what we can do and what we can get together on.” EU lending declined for a third quarter in a row Triggered by the eurozone’s slow economic recovery and lockdowns, demand for loans and credit lines turned lower according to the ECB. The central bank believes credit lines will continue to tighten in Q2 but expects loan demand to increase due to postponed investments. The ECB’s rate-setting committee will hold a meeting on Thursday to discuss current policy, though economists are not expecting any changes.