Daily Market Color

Rates Rise as Top Congressional Leaders Discuss Stimulus

Rates rise as Congress makes progress towards a spending bill
Top Congressional leaders will meet later to discuss a virus relief package.  The news pushed major indices higher – the S&P 500 and DJIA rose 1.3% and 1.1%, respectively.  Treasury yields and swap rates rose across a steepening curve – the 2y10y spread widening out to nearly 80 bps.
Industrial production rose 0.4% in November
The pace of industrial growth slowed last month from October’s 0.9%, with production 5% lower than pre-pandemic levels.  Manufacturing grew 0.8% due to a 5.3% gain in vehicle and parts production but was offset by a 4.3% decline in utilities.
FDA advisory committee to review Moderna vaccine on Thursday
Once the advisory committee greenlights the vaccine, the FDA will vote on whether to approve it.  It could happen as early as this week, which would make Moderna’s vaccine the second one approved in the US after Pfizer’s.
Pound rallies while euro reaches 2.5-year high on Brexit optimism
Brexit negotiators hope to reach a final deal by the December 31st deadline despite their significant differences.  UK Prime Minister Boris Johnson still believes a no-deal Brexit is “most likely” to occur, but added that the UK is willing to strike a deal with the EU but “not at any cost.”

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