Daily Market Color October 19, 2020Treasury Yields Rise on Stimulus Hopes Equities are starting the session in the green as stimulus talks continue to drive the market After making some progress with the White House, House Speaker Nancy Pelosi set a Tuesday deadline for a compromise on a deal with Treasury Secretary Steven Mnuchin. The pair last spoke Saturday night and plan to meet again today. Stocks opened higher this morning on the news. Treasury yields and swap rates are trading 1-3 bps higher across the curve this morning. Virus update The US continues to see a rise in infections across the country. It is now the fifth day in a row where daily numbers top 50,000. Over in Italy, cases hit a daily record, but officials have yet to impose new restrictions, with Prime Minister Conte adding, “The country cannot afford a new setback which would severely jeopardize the whole economy.” London and Paris enforced tighter restrictions, but the scientists there continue to advocate for another lockdown, adding, “The current tiered restrictions will not bring the transmission rates down sufficiently or prevent the continues spread of the virus.” Global cases are nearing 40.5 million with fatalities topping 1.19 million. Week ahead Fed Chair Jerome Powell began his speech on cross-border payments and digital currencies this morning at the International Monetary Fund. Tomorrow, the housing starts figure will be released, with economists predicting the level will rise after unexpectedly decline in August. US initial jobless claims will be published on Thursday after staying at elevated levels for the past few weeks. The number is expected to fall to 845,000, slightly lower than last week’s 898,000.
