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Market Commentary


 
 
Today's Coupons
 
  10-Year Notes   99-29.5 (+06)  
 
  FN 2.5% Coupon   105-03 (-00.5)  
 
  Support   1.942%  
 
  Resistance   0.505%  
 
 
 
 
  Friday, August 21, 2020
 
 

Treasury Yields Nearly Unchanged on the Back of Positive Economic Data

 
 
Market opened today’s session with treasuries nearly unchanged across all maturities. 10-Year Treasury yield is at 0.6509, unchanged from prior closing of 0.6509.

US stocks opened mixed this morning as an equity tech and healthcare rally in Europe lost steam. Notable US gainers include Deere & Co. after raising forward guidance in addition to announcing staff cuts to reduce costs. Pfizer and BioNTech SE also saw early gains following news that their coronavirus inoculation is headed to regulators as early as October. In other news, treasuries and German bunds advanced as the dollar headed for its first weekly gain since June. In the US, Joe Biden accepted the Democratic party's nomination on Thursday, officially becoming the contender to challenge President Donald Trump. Elsewhere, Turkey's Lira gained amid speculation President Recep Tayyip Erdogan will announce a major Turkish energy discovery in the Black Sea later today. Stocks climbed in Hong Kong, Japan, and China even as the offshore Yuan rose to its strongest level in seven months against the dollar, all thanks to China's economic recovery proving to be one of the world's fastest. On the economic front, Markit US Manufacturing PMI reported at 53.60, beating expectations of 52.00. Today's reading comes in contrast to the value of 50.30 reported a year ago, in addition to having output rise to 53.90 in comparison to a value of 51.70 in July. In all totality, today's PMI marks the highest value reported since January 2019. Existing home sales beat expectations after rising a record 24.70%, reporting at 5.86 million for the month of July. Sales of previously owned homes rose to record levels in July with low mortgage rates providing a key source of strength for economic recovery. With cheaper borrowing costs, pent-up demand and greater interest in suburban markets following the pandemic-related shutdown, housing has managed to gain plenty of momentum. At the same time lean inventory, higher asking prices, and the coronavirus itself represent hurdles to further outsize gains, as was stated by NAR's chief economist Lawrence Yun.

The curve has flattened with UST 10-Year yield unchanged.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  08/17 Empire Manufacturing 05:30 Aug 15.00 3.70 17.20 -  
                   
  08/17 Net Long-term TIC Flows 13:00 Jun $113.00B $127.00B $118.10B -  
                   
  08/17 Total Net TIC Flows 13:00 Jun -$67.90B -$4.50B -$15.90B -  
                   
  08/18 Housing Starts 05:30 Jul 1245k 1496k 1186k 1220k  
                   
  08/18 Housing Starts MoM 05:30 Jul 5.00% 22.60% 17.30% 17.50%  
                   
  08/18 Building Permits 05:30 Jul 1326k 1495k 1241k 1258k  
                   
  08/18 Building Permits MoM 05:30 Jul 5.40% 18.80% 2.10% 3.50%  
                   
  08/19 MBA Mortgage Applications 04:00 14 Aug - -3.30% 6.80% -  
                   
  08/20 Philadelphia Fed Business Outlook 05:30 Aug 20.80 17.20 24.10 -  
                   
  08/20 Initial Jobless Claims 05:30 15 Aug 920k 1106k 963k 971k  
                   
  08/20 Continuing Claims 05:30 8 Aug 15000k 14844k 15486k 15480k  
                   
  08/20 Bloomberg Consumer Comfort 06:45 16 Aug - 43.50 43.70 -  
                   
  08/20 Leading Index 07:00 Jul 1.10% 1.40% 2.00% 3.00%  
                   
  08/21 Markit US Services PMI 06:45 Aug P 51.00 54.80 50.00 -  
                   
  08/21 Markit US Composite PMI 06:45 Aug P - 54.70 50.30 -  
                   
  08/21 Existing Home Sales 07:00 Jul 5.41m 5.86m 4.72m 4.70m  
                   
  08/21 Existing Home Sales MoM 07:00 Jul 14.60% 24.70% 20.70% 20.20%
                   
 
 
 
 
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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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