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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   98-04 (-20.5) 2.337%  
  FN 3.5% Coupon   103-10 (-13.5)  
  Support   2.400%  
  Resistance   1.620%  
Today's Blurb Wednesday, June 03, 2015
      MBA Mortgage Applications for the week ended May 29th continued to decline for the fifth consecutive week, down -7.6% vs. -1.6% prior (+6.2% YoY). Purchases fell -3.0% vs. +1.2% prior (+14.5% YoY), Refinancing fell -11.5% vs. -3.9% prior (-1.2% YoY), and the average interest rate for a 30-Year Conventional loan fell -5 bps from 4.07% to 4.02%. ADP Employment Change met economist forecast at 201K (consensus 200K) and April was revised down from 169K to 165K, forecasting a largely on-target Nonfarm Payrolls Report this Friday. It is important to note that over the past 12 months ADP has diverged from actual Nonfarm payrolls by an average of 40K, making it at best a modest/lax barometer for payrolls. The Trade Deficit for April narrowed more than forecast, shrinking by -19.2% to -$40.9 Billion from -$50.6 Billion (consensus -$44.0 Billion). Imports declined by -3.3% to $230.8 Billion after surging +6.5% in March following the clearing of the backlogged West Coast ports. Exports increased +1% to $189.9 Billion, the highest level this year on increased aircraft shipments and telecommunications equipment. Treasuries are selling off this morning following the data release and an announcement from the European Central Bank stating they plan to allow their current monetary stimulus to run its course in light of higher growth forecasts post program implementation, this relieved some of the haven demand for U.S. Treasuries and boosted yields abroad. Yield on the 10-Year note jumped +7 bps to 2.33% following the announcement/data and similar maturity German bund rates hit the highest level this year. The curve has bear steepened with 2s10s up +6 bps.
This Week's Events
  06/01 Personal Income 05:30 Apr 0.30% 0.40% 0.00% -  
  06/01 Personal Spending 05:30 Apr 0.20% 0.00% 0.40% 0.50%  
  06/01 PCE Deflator MoM 05:30 Apr 0.10% 0.00% 0.20% -  
  06/01 PCE Deflator YoY 05:30 Apr 0.20% 0.10% 0.30% -  
  06/03 MBA Mortgage Applications 04:00 May 29 - -7.60% -1.60% -  
  06/03 ADP Employment Change 05:15 May 200K 201K 169K 165K  
  06/03 Beige Book 11:00 - - - - -  
  06/04 Initial Jobless Claims 05:30 May 30 278K - 282K -  
  06/04 Continuing Claims 05:30 May 23 2207K - 2222K -  
  06/05 Nonfarm Payrolls 05:30 May 227K - 223K -  
  06/05 Unemployment Rate 05:30 May 5.40% - 5.40% -  
  06/05 Labor Force Participation rate 05:30 May - - 62.80% -  
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  This information is provided solely for informational use and is not intended as trading or investment advice 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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