Daily Market Color January 22, 2021Rates Climb as Jobless Claims Remain Elevated Rates climb after President Biden’s inauguration Markets are optimistic that the economy will continue to recover and remain focused on the new administration’s initiatives. Major equity indices ended the day flat, as both the S&P 500 and DJIA experienced less than a 0.1% change. Treasury yields and swap rates rose on the day – the 10-year UST yield closed ~2 bps higher at 1.10%. 900,000 jobless claims were filed last week The figure fell moderately from 926,000 the week prior but is still significantly higher from pre-pandemic levels. The number pulled the four-week moving average higher to 848,000. US housing starts and permits rose to 1.669 million and 1.709 million in December The figures rose 5.8% and 4.5%, respectively, from the month prior – the fastest pace since 2006. Historically low mortgage rates continue to support the acceleration in homebuilding, but economists predict the growth could slow in the coming months due to labor shortages and rising lumber prices. ECB leaves benchmark rate unchanged at 0.5% In a press conference earlier today, ECB President Christine Lagarde also announced the bank would continue to purchase up to €1.85 trillion ($2.25 trillion) of eurozone bonds through March 2022, though she is open to changing the program if needed. Though Lagarde is optimistic for the future, she commented, “the pandemic continues to pose serious risks to public health and to the euro area and global economies.”
