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Stimulus Status-Quo

US TSYS SUMMARY

Tsys continued to trade lower Wednesday, Eurodollar futures steady to marginally mixed, equities modestly higher, rates and stocks holding to an inside-range by the close. Appears markets are becoming a little more inured to stimulus-related headlines that have buffeted markets the last few sessions.

  • * Stimulus status-quo: while House Speaker Pelosi remains optimistic a deal can be reached before the election on Nov 3, Republicans widely pan the prospect of an passing a deal even if one is agreed upon in the WH.
  • * Meanwhile, Covid-19 case counts continue to rise globally (new one-day jump for Italy by 15,199).
  • * Little to no react to another deluge of Fed speakers, VC Quarles stated late "FED EMERGENCY LOAN FACILITIES OFFER BACKSTOP IF NEEDED" a "GOOD THING THAT EMERGENCY PROGRAMS STILL HAVE FUNDS".
  • * Decent US Tsy $22B 20Y bond auction re-open (912810SQ2) draws high yield of 1.370% (1.213% last month) vs. 1.375% WI, on a bid/cover 2.43 (2.39 previous).
  • *The 2-Yr yield is up 0.4bps at 0.1472%, 5-Yr is up 1.5bps at 0.349%, 10-Yr is up 2.7bps at 0.8125%, and 30-Yr is up 3bps at 1.6216%.

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