Back to top

Market Commentary

Market Commentary

January 07, 2015
10-YEAR NOTES   102-17 (-07)
FN 3.5% COUPON   105-05.5 (-03)
SUPPORT   2.40%
Scan with your
    MBA Mortgage Applications reversed the prior week’s 18.2% loss with a +11.1% advance for the week ending January second. Purchases increased +4.5% vs. -9.1% prior (-8.2% YoY), Refinancing rose +16.0% vs. -24.3% prior (-1.9% YoY), and the average interest rate for a 30-Year conventional conforming loan declined -3 bps to 4.01% vs. 4.72% a year ago. ADP Employment Change came in strong at 241K vs. consensus of 225K, with the prior revised up +19K to 227K. The goods and services deficit was $39.0 Billion November, down -$3.2 Billion from $42.2 Billion in October (revised). November’s decline in the Goods and Services Deficit reflected a -$3.3 Billion decrease in the Goods Deficit to $58.3 Billion and a -$0.1 Billion decrease in the Services Surplus to $19.3 Billion. At 11:00 AM (PST) the Fed will release the minutes from its December 16-17th meeting.

    Yesterday, treasuries continued their rally into the seventh consecutive day as falling oil prices (below $50 a barrel) and a strong dollar continue to dampen the outlook for inflation.  The 10-Year note rallied +20.5 ticks, pushing yields down -6.9 bps to push through resistance at 1.969%. The coupon stack compressed, tightening 3-5 ticks in the belly coupons, and MBS underperformed treasury hedges by 1-3 ticks with the lower coupons outperforming the higher coupons. The curve continued to bull flatten with 2s10s down -4.7 bps to 132.9, pulling the 20 day average to 151.7 vs. 170.5 prior. Long end yields fell, pushing the 30-Year bond to the lowest level since July 2012, down -8.1 bps to 2.523%. The 30-Year current coupon declined -7 bps on the day, closing at 2.63% and the 15-Year followed suit, down -3 bps to 1.94%. The G2/FN declined 1.5-3.5 ticks in the production coupons led by a -2.25 tick decrease in the 3.5% coupon. The G2/FN 3.5% swap declined to 0-18.25 vs. 0-20.5 prior. Today treasuries are declining ahead of the FOMC minutes release, and the curve has bear flattened with 2s10s down -0.2 bps with MBS underperforming treasury hedges.
This Week's Events:
01/07 MBA Mortgage Applications 04:00 January 2 - 11.1% -18.2% -
01/07 ADP Employment Change 05:15 December 225K 241K 208K 227K
01/07 Trade Balance 05:30 November -$42.0 Billion -$39.0 Billion -$43.4 Billion -$42.2 Billion
01/07 FOMC Minutes 11:00 December 16-17 - - - -
01/08 Initial Jobless Claims 05:30 January 3 290K - 298K -
01/08 Continuing Claims 05:30 December 27 2360K - 2353K -
01/09 Nonfarm Payrolls 05:30 December 240K - 321K -
01/09 Unemployment Rate 05:30 December 5.7% - 5.8% -
01/09 Wholesale Inventories MoM 07:00 November 0.3% - 0.4% -
Visit Us Online

Get Approved

Download Rate Sheet

Price & Lock

Submit Loan

Resolve Loan Conditions

Conventional Program Guidelines

Government Program Guidelines
For more information, please call:

FHA Programs
VA Programs
USDA Rural Housing
HECM Reverse Mortgage
Conforming Products
FHA Multifamily, PowerSaver

GNMA Issuer
Fannie Mae and Freddie Mac Direct Lender
Licensed throughout the U.S. and Puerto Rico
Privately Held Mortgage Bank for Over 32 Years
Excellent Underwriting / Funding Turn Times

This information is provided solely for informational use and is not intended as a trading or investment advice in any manner whatsoever. Sun West Mortgage Company, Inc. is not liscensed or registered broker or dealer and cannot provide investment strategies or recommendations. This information is provided to brokers/lenders only and may not be copied or distributed to customers or potential customers. All loans are subject to approval. Certain restrictions may apply. Listed pricing is a morning indication only. Program rates, price, guidelines, fees, costs, terms and conditions are subject to change without notice.