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Market Commentary


 
 
Today's Coupons
 
  10-Year Notes   101-00.5 (-10.5)  
 
  FN 3.5% Coupon   103-03.5 (00)  
 
  Support   2.753%  
 
  Resistance   1.503%  
 
 
 
 
  Wednesday, February 5, 2020
 
 

Treasury Yields Climb Further as Stocks Advance for a Third Day

 
 
Market opened today’s session with treasuries selling-off across all maturities. 10-Year Treasury yield is at 1.6491, 5.00 bps increased from prior closing of 1.5991.

Stocks rallied globally for a third day and bonds tumbled again as investors weighed further measures that governments are introducing to fight the coronavirus. However, the number of confirmed cases of the coronavirus has increased to almost 25,000 with the death pool now nearing 500. Both United Airlines and American Airlines suspended flights to Hong Kong due to a drop in demand. As the spread of the coronavirus shows no signs of slowing down, the economic damage is also mounting with hundreds of supply chains cut due to the extended holiday in China. In corporate news, Disney topped their estimates but warned that its theme parks would likely to experience a $175 million hit due to the coronavirus. Ford, on the other hand, slipped after posting disappointing quarterly results and guidance for 2020. Elsewhere, WTI crude headed for its first gain in six sessions after closing the previous session below $50 a barrel, trading above $51 a barrel this morning.

ADP Employment Change in January also lifted investor sentiment today, printing 291k vs. revised prior of 199k and 157k consensus. MBA Mortgage Applications index rose 5.00% after rising 7.20% in prior week. Purchases declined 9.50% and refinances increased 15.30% after rising 5.30% and 7.50% in prior week, respectively. Meanwhile, Trade Deficit widened to $48.90 billion from revised prior of $43.70 billion vs. $48.20 billion consensus. Both Markit US Services PMI and Composite PMI slightly edged higher to 53.40 and 53.30 from prior readings of 53.20 and 53.10, respectively. Lastly, ISM Non-Manufacturing Index in January also climbed to 55.50 from a downwardly revised prior of 54.90 vs. 55.10 consensus.

The curve has bear-steepened with UST 10-Year yield up 5.00 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  02/03 Construction Spending MoM 07:00 Dec 0.50% -0.20% 0.60% 0.70%  
                   
  02/03 ISM Manufacturing 07:00 Jan 48.50 50.90 47.20 47.80  
                   
  02/03 ISM Prices Paid 07:00 Jan 51.00 53.30 51.70 -  
                   
  02/04 Factory Orders 07:00 Dec 1.20% 1.80% -0.70% -1.20%  
                   
  02/04 Durable Goods Orders 07:00 Dec F 2.40% 2.40% 2.40% -  
                   
  02/04 Durables Ex Transportation 07:00 Dec F -0.10% -0.10% -0.10% -  
                   
  02/05 MBA Mortgage Applications 04:00 31 Jan - 5.00% 7.20% -  
                   
  02/05 ADP Employment Change 05:15 Jan 157K 291K 202K 199K  
                   
  02/05 Trade Balance 05:30 Dec -$48.20b -$48.90b -$43.10b -$43.70b  
                   
  02/05 Markit US Services PMI 06:45 Jan F 53.20 53.40 53.20 -  
                   
  02/05 Markit US Composite PMI 06:45 Jan F - 53.30 53.10 -  
                   
  02/06 Initial Jobless Claims 05:30 1 Feb 215K - 216K -  
                   
  02/06 Continuing Claims 05:30 25 Jan 1720K - 1703K -  
                   
  02/06 Bloomberg Consumer Comfort 06:45 2 Feb - - 67.30 -  
                   
  02/07 Change in Nonfarm Payrolls 05:30 Jan 162K - 145K -  
                   
  02/07 Average Hourly Earnings MoM 05:30 Jan 0.30% - 0.10% -  
                   
  02/07 Average Hourly Earnings YoY 05:30 Jan 3.00% - 2.90% -  
                   
  02/07 Wholesale Inventories MoM 07:00 Dec F -0.10% - -0.10% -  
                   
  02/07 Wholesale Trade Sales MoM 07:00 Dec 0.10% - 1.50% -
                   
 
 
 
 
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  This information is provided solely for informational use and is not intended as an advice for trading or investment purposes in any manner whatsoever. Sun West Mortgage Company, Inc. is not a licensed or registered broker or dealer and cannot provide investment strategies or recommendations. This information is provided to licensed 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, prices, guidelines, fees, costs, terms and conditions are subject to change without notice.  
 
 
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