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Market Commentary


 
 
Today's Coupons
 
  10-Year Notes   108-20 (+22)  
 
  FN 3.5% Coupon   105-28 (+03)  
 
  Support   2.594%  
 
  Resistance   0.336%  
 
 
 
 
  Wednesday, April 1, 2020
 
 

Treasury Yields Lower as Stocks Tumble into Second Quarter

 
 
Market opened today’s session with treasuries rallying across all maturities. 10-Year Treasury yield is at 0.5848, 8.47 bps decreased from prior closing of 0.6695.

Stocks fell sharply, starting the second quarter with deep losses as investor sentiment was dampened by a warning from President Trump that the US should prepare for a very painful two-week period of the pandemic. Stocks ended its worst quarter yesterday since 2008 after reaching its all-time high record in February. Treasuries rose along with the dollar, however, mortgage TBAs underperformed Treasuries. MBA mortgage applications index rose 15.30% last week after falling 29.40% in the week prior. Purchases decreased 10.80% but refinances surged 25.50% after falling 14.60% and 33.80% in prior week, respectively. Purchase applications fell for a third straight week to the lowest level since November 2016 as the ongoing economic shutdown prevented potential buyers from shopping. However, the surge in refinances can positively trace back to the Fed’s recent efforts to calm the capital markets. The employment change in March showed that the US companies cut 27k jobs through March 12 which is suspected to be not enough to capture the actual collapse. However, both Markit US Manufacturing PMI and ISM Manufacturing data managed to come in above its consensuses at 48.50 and 49.10, respectively. Lastly, Construction Spending from February fell to -1.30% from an upwardly revised prior of 2.80% vs. 0.60% consensus.

The curve has bull-flattened with UST 10-Year yield down 8.47 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  03/30 Pending Home Sales MoM 07:00 Feb -1.80% 2.40% 5.20% 5.30%  
                   
  03/31 S&P CoreLogic CS 20-City MoM SA 06:00 Jan 0.40% 0.30% 0.43% 0.41%  
                   
  03/31 S&P CoreLogic CS 20-City YoY NSA 06:00 Jan 3.20% 3.08% 2.85% 2.84%  
                   
  04/01 MBA Mortgage Applications 04:00 27 Mar - 15.30% -29.40% -  
                   
  04/01 ADP Employment Change 05:15 Mar -150k -27k 183k 179k  
                   
  04/01 Markit US Manufacturing PMI 06:45 Mar F 48.00 48.50 49.20 -  
                   
  04/01 Construction Spending MoM 07:00 Feb 0.60% -1.30% 1.80% 2.80%  
                   
  04/01 ISM Manufacturing 07:00 Mar 44.50 49.10 50.10 -  
                   
  04/01 ISM Prices Paid 07:00 Mar 41.80 37.40 45.90 -  
                   
  04/02 Initial Jobless Claims 05:30 28 Mar 3500k - 3283k -  
                   
  04/02 Continuing Claims 05:30 21 Mar 4941k - 1803k -  
                   
  04/02 Bloomberg Consumer Comfort 06:45 29 Mar - - 59.70 -  
                   
  04/02 Durable Goods Orders 07:00 Feb F 1.20% - 1.20% -  
                   
  04/02 Durables Ex Transportation 07:00 Feb F -0.60% - -0.60% -  
                   
  04/03 Change in Nonfarm Payrolls 05:30 Mar -100k - 273k -  
                   
  04/03 Average Hourly Earnings MoM 05:30 Mar 0.20% - 0.30% -  
                   
  04/03 Average Hourly Earnings YoY 05:30 Mar 3.00% - 3.00% -  
                   
  04/03 Markit US Services PMI 06:45 Mar F 38.50 - 39.10 -  
                   
  04/03 Markit US Composite PMI 06:45 Mar F - - 40.50 -
                   
 
 
 
 
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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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