Yields declined across the curve this week, reversing last week's yield curve steepening and sending the closing yield on the 10-year Treasury below 90 bps for the first time this month. The largest move in yields came on Friday as news of a stalemate in fiscal stimulus negotations reduced the likelihood of a deal while the government is poised to shutdown for lack of funding this evening. The stopgap spending bill, which has already passed a House vote and is awaiting Senate action, is necessary as annual appropriations bils for the fiscal year that began October 1 have not yet been enacted.
The week's economic data calendar was farily light, with the weekly jobless claims release drawing the most attention. It indicated that the labor market continues to weaken as US Covid infections reach new records. 853,000 initial claims were filed for the week, which was a meaningful increase from the prior week. Contiuning claims also rose, with nearly 5.8mm Americans continuing to receive jobless benefits.