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Market Commentary


 
Today's Coupons
 
  10-Year Notes   102-29.5 (+04.5)  
 
  FN 3.5% Coupon   102-13.5 (+03)  
 
  Support   3.237%  
 
  Resistance   1.939%  
 
 
 
 
Wednesday, July 31, 2019
 
 
Treasury Yields Drift, U.S. Stocks Rise
 
 
Market opened today’s session with treasuries slightly higher from prior close. The 10-Year treasury yield is currently at 2.043 after closing at 2.059 prior.

Treasuries were choppy overnight and opened the session a little stronger than yesterday’s closing levels ahead of the Federal Reserve’s rate decision later today at 11:00 AM (PT). Fed President Powell is scheduled to hold a press conference following the conclusion of the FOMC meeting as investors shift their focus on the trajectory of interest rates. Meanwhile, U.S. Stocks are trading slightly better on strong earnings reports and news that U.S. and Chinese officials set a date for further trade discussions in September. The S&P 500 saw its first advance in three sessions after Apple Inc. and General Electric Co. lifted forecasts. Elsewhere, the dollar weakened against major peers as markets prepared for the Fed’s anticipated rate cut. In commodities, West Texas oil climbed above $58 a barrel.

On the economic calendar, we received the MBA Mortgage Applications for the week ended July 26th which fell 1.40% following a 1.90% decline the week prior. Purchase applications dropped 3.00% after falling 1.60% the week prior, as purchases index saw its lowest level since the week ending March 15th. Refinancing activities showed a slight increase of 0.10% after declining 2.10% the week prior. We also received the July ADP Employment Change which showed an increase of 156k, slightly better than the expected 150k addition; its prior mark was revised higher from 102k to 112k. Lastly, the 2Q Employment Cost Index came in slightly lower than expected at 0.60% versus 0.70% per consensus; its prior level remained unchanged at 0.70%.

The curve has bull-steepened with the UST 10-Year yield down 1.6 bps from prior closing.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  07/29 Dallas Fed ManfActivity 07:30 Jul -6.00 -6.30 -12.10 -  
                   
  07/30 Personal Income 05:30 Jun 0.40% 0.40% 0.50% 0.40%  
                   
  07/30 Personal Spending 05:30 Jun 0.30% 0.30% 0.40% 0.50%  
                   
  07/30 PCE Deflator MoM 05:30 Jun 0.10% 0.10% 0.20% 0.10%  
                   
  07/30 PCE Deflator YoY 05:30 Jun 1.50% 1.40% 1.50% 1.40%  
                   
  07/30 S&P CoreLogic CS 20-City MoM SA 06:00 May 0.20% 0.14% 0.00% 0.03%  
                   
  07/30 S&P CoreLogic CS 20-City YoY NSA 06:00 May 2.40% 2.39% 2.54% 2.53%  
                   
  07/30 Pending Home Sales MoM 07:00 Jun 0.50% 2.80% 1.10% -  
                   
  07/30 Pending Home Sales NSA YoY 07:00 Jun 0.70% -0.60% -0.80% -  
                   
  07/31 MBA Mortgage Applications 04:00 26 Jul - -1.40% -1.90% -  
                   
  07/31 ADP Employment Change 05:15 Jul 150k 156k 102k 112k  
                   
  07/31 Employment Cost index  05:30 2Q 0.70% 0.60% 0.70% -  
                   
  07/31 FOMC Rate Decision (Upper Bound) 11:00 31 Jul 2.25% - 2.50% -  
                   
  07/31 FOMC Rate Decision (Lower Bound) 11:00 31 Jul 2.00% - 2.25% -  
                   
  08/01 Challenger Job Cuts YoY 04:30 Jul - - 12.80% -  
                   
  08/01 Initial Jobless Claims 05:30 27 Jul 214k - 206k -  
                   
  08/01 Continuing Claims 05:30 20 Jul 1678k - 1676k -  
                   
  08/01 Bloomberg Consumer Comfort 06:45 28 Jul - - 63.70 -  
                   
  08/01 Markit US Manufacturing PMI 06:45 Jul F 50.00 - 50.00 -  
                   
  08/01 ISM Manufacturing 07:00 Jul 52.00 - 51.70 -  
                   
  08/01 ISM Prices Paid 07:00 Jul 49.00 - 47.90 -  
                   
  08/01 Construction Spending MoM 07:00 Jun 0.30% - -0.80% -  
                   
  08/02 Change in Nonfarm Payrolls 08:00 Jul 165k - 224k -  
                   
  08/02 Unemployment Rate 05:30 Jul 3.70% - 3.70% -  
                   
  08/02 Average Hourly Earnings MoM 05:30 Jul 0.20% - 0.20% -  
                   
  08/02 Average Hourly Earnings YoY 05:30 Jul 3.10% - 3.10% -  
                   
  08/02 Labor Force Participation Rate 05:30 Jul 62.90% - 62.90% -  
                   
  08/02 Trade Balance 05:30 Jun -54.60b - -55.50b -  
                   
  08/02 Factory Orders 07:00 Jun 0.70% - -0.70% -  
                   
  08/02 Durable Goods Orders 07:00 Jun F - - 2.00% -  
                   
  08/02 Durables Ex Transportation 07:00 Jun F - - 1.20% -  
                   
  08/02 U. of MichSentiment 07:00 Jul F 98.50 - 98.40 -
                   
 
 
 
 
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  This information is provided solely for informational use and is not intended as an advice for trading or investment purposes 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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