Yield Curve Flattens as Tech Shares Rally

Yield curve flattens as tech shares rally

Swap rates and yields fell across a flattening curve on the day driving a rally in tech stocks. The long-end of the curve rallied on the day with the 10yr falling 5bps to close at 1.48%. The curve has flattened in recent weeks as Fed officials have shown a willingness to act fast if inflationary data continues to put pressure on the economy. The flattening of the curve helped fuel a rally in tech shares as the tech-heavy Nasdaq increased 0.98% during trading to close on a record high.

CRE loan growth improving as 2Q comes to an end

Loan growth still continues to be a struggle for both large and small U.S. banks in 2021. However, CRE loans at small banks have been trending upward during 2Q with QTD annualized growth at 5.29% compared to YTD annualized growth of 3.70%. Cash levels at banks continue to soar as record amounts of stimulus has added unprecedented liquidity to bank’s balance sheets.

This week’s economic data

The rest of the week’s economic data includes the consumer confidence index and YOY home price data being released tomorrow, the ADP employment report and Chicago PMI printing on Wednesday, and the ISM manufacturing index announced on Thursday. June’s nonfarm jobs report will be released on Friday, and there is a slate of Fed president’s slotted to speak this week.