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%.
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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.