Treasury Yields Edge Higher on Positive China Outlook
Marketopened today’s session with treasuries slightly lower across all maturities, but most overnight losses have been erased since. The 10-Yeartreasury yield is currently at 2.589 after closing at 2.591 prior.
Treasuries weakened overnight while U.S. stock futures gained after data showed optimism for China’s economic outlook. Market sentiment bolstered as China’s economic growth, industrial production, and retail sales all beat expectations. Amid its reported 6.40% first quarter GDP growth, the country’s leaders are now considering more stimulus measures to support the growth momentum. In the U.S., the trade balance narrowed further in February after tightening much more than expected in January. Economists expected the trade balance to widen to $53.40 billion, but the gap narrowed to $49.40 billion from $51.10 billion prior. From a bilateral standpoint, the trade deficit has sharply narrowed with both China and the European Union to start 2019. In the latest batch of corporate earnings, Morgan Stanley and PepsiCo Inc. both posted solid results, while Netflix Inc. and IBM Corp. both came in weaker than expected.
MBA Mortgage Applications for the week ended April 12 fell 3.50% following a 5.60% decline the week prior. Purchase applications were up 0.90% after reporting a 0.50% increase the week prior, while refinancing activities dropped 8.20% after falling 11.40% the week prior. Wholesale Inventories rose 0.20% in February following an unrevised 1.20% increase in January. Consensus called for a 0.30% increase month-over-month, so the data came in slightly weaker than expected. Wholesale Trade Sales came in line with expectations which rose 0.30% in February following an unrevised 0.50% increase prior. Philadelphia Fed President Harker and St. Louis Fed President Bullard will speak later this morning on the economic outlook. Then at 11:00 AM (PT), the latest version of the Fed’s Beige Book will be released.
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Treasuries weakened overnight while U.S. stock futures gained after data showed optimism for China’s economic outlook. Market sentiment bolstered as China’s economic growth, industrial production, and retail sales all beat expectations. Amid its reported 6.40% first quarter GDP growth, the country’s leaders are now considering more stimulus measures to support the growth momentum. In the U.S., the trade balance narrowed further in February after tightening much more than expected in January. Economists expected the trade balance to widen to $53.40 billion, but the gap narrowed to $49.40 billion from $51.10 billion prior. From a bilateral standpoint, the trade deficit has sharply narrowed with both China and the European Union to start 2019. In the latest batch of corporate earnings, Morgan Stanley and PepsiCo Inc. both posted solid results, while Netflix Inc. and IBM Corp. both came in weaker than expected.
MBA Mortgage Applications for the week ended April 12 fell 3.50% following a 5.60% decline the week prior. Purchase applications were up 0.90% after reporting a 0.50% increase the week prior, while refinancing activities dropped 8.20% after falling 11.40% the week prior. Wholesale Inventories rose 0.20% in February following an unrevised 1.20% increase in January. Consensus called for a 0.30% increase month-over-month, so the data came in slightly weaker than expected. Wholesale Trade Sales came in line with expectations which rose 0.30% in February following an unrevised 0.50% increase prior. Philadelphia Fed President Harker and St. Louis Fed President Bullard will speak later this morning on the economic outlook. Then at 11:00 AM (PT), the latest version of the Fed’s Beige Book will be released.
The curve has bull-steepened with the UST 10-Year yield down 0.2 bp from prior closing.