Treasury Yields Slightly Lower after Powell hints a rate cut
Market opened today’s session with treasuries drifting across all maturities. 10-YearTreasury yield is at 2.0613, 0.35 bp decreased from prior closing of 2.0648.
US stock futures rose along with Treasuries after Fed Chair Powell signaled the Fed’s openness to a rate cut as early as this month. He said “crosscurrents have reemerged”, stressing that downside risks to the US economy are lingering as uncertainties mount from ongoing trade wars and weak inflation despite of a recent truce with China. His dovish statement came even after Friday’s strong jobs report which strengthened the case for a rate cut in the near future. The Fed’s chief is also scheduled to testify again before the Senate Banking Committee tomorrow. Meanwhile, US Trade Representative Lighthizer and Treasury Secretary Mnuchin spoke on the phone with their Chinese counterparts yesterday in the first confirmed contact between the two countries after it was agreed to resume trade talks last month at the G-20 summit. In Europe, the European Commission cut its growth and inflation forecast for next year as they saw that a recession in their largest economy was almost inevitable. Elsewhere, WTI crude rallied above $59 a barrel this morning.
MBA Mortgage Applications index fell 2.40% after falling 0.10% in prior week. Purchases increased 2.30% and refinances declined 6.50% after rising 1.10% and falling 1.20% in prior week, respectively. Wholesale Inventories in May came in line with both prior reading and consensus of 0.40%. At 11:00 AM (PT), the minutes from the latest FOMC meeting will be released. Also later today, the US Treasury is scheduled to auction off $24 billion of 10-Year Notes reopening at 10:00 AM (PT).
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US stock futures rose along with Treasuries after Fed Chair Powell signaled the Fed’s openness to a rate cut as early as this month. He said “crosscurrents have reemerged”, stressing that downside risks to the US economy are lingering as uncertainties mount from ongoing trade wars and weak inflation despite of a recent truce with China. His dovish statement came even after Friday’s strong jobs report which strengthened the case for a rate cut in the near future. The Fed’s chief is also scheduled to testify again before the Senate Banking Committee tomorrow. Meanwhile, US Trade Representative Lighthizer and Treasury Secretary Mnuchin spoke on the phone with their Chinese counterparts yesterday in the first confirmed contact between the two countries after it was agreed to resume trade talks last month at the G-20 summit. In Europe, the European Commission cut its growth and inflation forecast for next year as they saw that a recession in their largest economy was almost inevitable. Elsewhere, WTI crude rallied above $59 a barrel this morning.
MBA Mortgage Applications index fell 2.40% after falling 0.10% in prior week. Purchases increased 2.30% and refinances declined 6.50% after rising 1.10% and falling 1.20% in prior week, respectively. Wholesale Inventories in May came in line with both prior reading and consensus of 0.40%. At 11:00 AM (PT), the minutes from the latest FOMC meeting will be released. Also later today, the US Treasury is scheduled to auction off $24 billion of 10-Year Notes reopening at 10:00 AM (PT).
The curve has bull-steepened with UST 10-Year yield down 0.35 bp.