Daily Market Color January 6, 2021Benchmark Treasury Yields Break 1% for First Time in 9 Months 10-year Treasury yield rises above 1% for first time since March Market sentiment remained positive throughout the day despite news that protestors swarmed the US Capital while Congress was counting the 2020 Presidential election electoral votes. Treasury yields and swap rates rose dramatically across the steepening curve – the 10-year UST yield closed 8 bps higher at 1.035%. Major equity indices closed higher – the S&P 500 and DJIA rose 0.6% and 1.4%, respectively. Both Democratic candidates claimed victory in Georgia runoff elections The win gives the Democratic party narrow control of the Senate and increases the chances of Congress passing additional COVID-19 relief in the future. ADP employment report shows private-sector payrolls contracted by 123,000 in December The reading missed economist expectations and marked the first contraction in private payrolls since April. According to the report, “the job losses were primarily concentrated in retail and leisure and hospitality.” The report comes days ahead of Friday’s key jobs report. December’s FOMC minutes reveal support to continue Fed’s bond-buying program Some officials voiced support for increasing monthly asset purchases while others favored a wait-and-see approach. The minutes detailed, “The recent sharp resurgence in the pandemic suggested that the near-term risks had risen, while the recent favorable developments regarding vaccines pointed to some reduction in the downside risks over the medium term.”
