Treasury Yields Slightly Rose as Stocks Extend Gains
Market opened today’s session with treasuries slightly edging loweracross all maturities. 10-YearTreasury yield is at 2.1500, 0.16 bp increased from prior closing of 2.1484.
Investor sentiment cautiously started turning optimistic as trade concerns have somewhat eased and many now expects the Fed to lower interest rates soon. Stocks got a lift yesterday from President Trump’s decision to indefinitely suspend the 5.00% levy on Mexican imports over the weekend, and the news continued to reverberate through markets this morning. The Dow was poised to extend its seventh day gain, heading for its longest winning streak since May 2018. Chinese equities also rallied overnight after their local government may reportedly use bonds to finance infrastructure projects now which helped offsetting the threat from President Trump to impose tariffs of 25.00% or “much higher than 25.00%” on $300 billion in Chinese goods if Chinese President Xi does not meet with him at the G-20 summit. Elsewhere, WTI crude edged higher, trading slightly below $54 a barrel this morning.
NFIB Small Business Optimism in May rose to 105.00 from prior reading of 103.50, indicating the domestic economy remains relatively resilient from the ongoing uncertainties. The headline PPI Final Demand in May came in line with consensus of 0.10%, following 0.20% in April and the core also met the expectation of 0.20%, following 0.10% in April. However, the YoY change declined to 1.80% from 2.20% prior vs. 2.00% consensus. Later today, the US Treasury is scheduled to auction off $38 billion of 3-year notes at 10:00 AM (PT).
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Investor sentiment cautiously started turning optimistic as trade concerns have somewhat eased and many now expects the Fed to lower interest rates soon. Stocks got a lift yesterday from President Trump’s decision to indefinitely suspend the 5.00% levy on Mexican imports over the weekend, and the news continued to reverberate through markets this morning. The Dow was poised to extend its seventh day gain, heading for its longest winning streak since May 2018. Chinese equities also rallied overnight after their local government may reportedly use bonds to finance infrastructure projects now which helped offsetting the threat from President Trump to impose tariffs of 25.00% or “much higher than 25.00%” on $300 billion in Chinese goods if Chinese President Xi does not meet with him at the G-20 summit. Elsewhere, WTI crude edged higher, trading slightly below $54 a barrel this morning.
NFIB Small Business Optimism in May rose to 105.00 from prior reading of 103.50, indicating the domestic economy remains relatively resilient from the ongoing uncertainties. The headline PPI Final Demand in May came in line with consensus of 0.10%, following 0.20% in April and the core also met the expectation of 0.20%, following 0.10% in April. However, the YoY change declined to 1.80% from 2.20% prior vs. 2.00% consensus. Later today, the US Treasury is scheduled to auction off $38 billion of 3-year notes at 10:00 AM (PT).
The curve has bear-flattened with UST 10-Year yield up 0.16 bp.