Market opened today’s session with treasuries edging lower across all maturities. 10-YearTreasury yield is at 2.0855, 2.42 bps increased from prior closing of 2.0613.
US equity futures slightly pared earlier gains after the latest inflation reading came in higher than expected. Treasuries also retreated from the data and yesterday’s dovish statement from Fed Chair Powell who is also scheduled for his second day of congressional testimony today. Market parsed his prepared statement from yesterday as confirming a rate cut later this month. In fact, many viewed it as so dovish that the focus now shifted from whether a rate cut will take place to how much the Fed will cut this time. Minutes from the latest FOMC meeting released yesterday further cemented market participants’ expectation on easier monetary policy. Elsewhere, WTI crude extended gains, trading above $60 a barrel this morning.
CPIMoM in June printed 0.10% above expectation of 0.00% following a prior reading of 0.10%. The YoY change came in line with consensus of 1.60% from 1.80% prior. Initial Jobless Claims edged lower to 209k from an upwardly revised prior of 222k vs. 221k consensus. On the contrary, Continuing Claims rose to 1723k from an upwardly revised prior of 1696k vs. 1683k consensus. Lastly, Bloomberg Consumer Comfort climbed to 63.80 from 62.60 prior. Later today, Monthly Budget Statement from June will be released at 11:00 AM (PT). Also, the US Treasury is scheduled to auction off $35 billion of 4-week bills and $35 billion of 8-week bills at 8:30 AM (PT), and $16 billion of 30-year bonds reopening at 10:00 AM (PT).
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US equity futures slightly pared earlier gains after the latest inflation reading came in higher than expected. Treasuries also retreated from the data and yesterday’s dovish statement from Fed Chair Powell who is also scheduled for his second day of congressional testimony today. Market parsed his prepared statement from yesterday as confirming a rate cut later this month. In fact, many viewed it as so dovish that the focus now shifted from whether a rate cut will take place to how much the Fed will cut this time. Minutes from the latest FOMC meeting released yesterday further cemented market participants’ expectation on easier monetary policy. Elsewhere, WTI crude extended gains, trading above $60 a barrel this morning.
CPI MoM in June printed 0.10% above expectation of 0.00% following a prior reading of 0.10%. The YoY change came in line with consensus of 1.60% from 1.80% prior. Initial Jobless Claims edged lower to 209k from an upwardly revised prior of 222k vs. 221k consensus. On the contrary, Continuing Claims rose to 1723k from an upwardly revised prior of 1696k vs. 1683k consensus. Lastly, Bloomberg Consumer Comfort climbed to 63.80 from 62.60 prior. Later today, Monthly Budget Statement from June will be released at 11:00 AM (PT). Also, the US Treasury is scheduled to auction off $35 billion of 4-week bills and $35 billion of 8-week bills at 8:30 AM (PT), and $16 billion of 30-year bonds reopening at 10:00 AM (PT).
The curve has bear-steepened with UST 10-Year yield up 2.42 bps.