December 3, 2020
Treasuries were mixed along the curve on Wednesday, with the yield curve steepening as market participants weighed fiscal stimulus updates from Washington. New efforts by bipartisan lawmakers to craft a fiscal stimulus deal helped push longer-dated Treasury yields higher for a second day, however, the path to a fifth coronavirus relief package that will appease both sides remained uncertain. The yield on the benchmark 10-year note rose two basis points to 0.94%, while the yield on the 30-year bond added three basis points to 1.69%. On the short-end of the curve, the yield on the two-year note slipped one basis point to 0.16%. Economic data was also in focus, with the ADP Employment report showing the U.S. added 307,000 private payrolls in November, lower than the expected 440,000 figure and October's upwardly revised 404,000 reading. The update preceded the Labor Department's first Friday monthly jobs report, which is anticipated to show 486,000 nonfarm payrolls were added to the U.S. economy in November, slowing from October's 638,000 uptick. Central bank news garnered attention, with the Fed's Beige Book noting that "little or no growth" was seen in a third of their regional districts as COVID-19 cases surged in many parts of the country. Separately, during Fed Chair Jerome Powell's testimony in front of the House Finance Panel, the Fed chief told lawmakers that additional fiscal aid was needed to help support the precarious recovery in the near-term. He also indicated that there were no hard feelings between the Federal Reserve and the Treasury Department over Steven Mnuchin's request to end some emergency lending programs at year end.
Municipal Market Commentary
Tax-exempt new issue supply is expected to total $6.37 billion during the week of November 30th, compared to last week's total of $755 million and the 2020 weekly average of $6.1 billion. The Bloomberg 30-day visible supply rose $849 million to $14.347 billion on Wednesday, below the 12-month average of $14.378 billion.
This information is obtained from sources and data considered to be reliable, but its accuracy and completeness is not guaranteed by Wells Fargo Advisors.
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