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Market Commentary


 
Today's Coupons
 
  10-Year Notes   100-9.5 (-04.5)  
 
  FN 3.5% Coupon   102-15.5 (-01.5)  
 
  Support   3.237%  
 
  Resistance   1.492%  
 
 
 
 
Thursday, August 22, 2019
 
 
Treasury Yields Drift on Mixed Economic Data
 
 
Market opened today’s session with treasuries fluctuating across all maturities. 10-Year Treasury yield is at 1.5808, 0.85 bp decreased from prior closing of 1.5893.

US stocks pared earlier gains on mixed economic data ahead of the start of a central banking summit in Jackson Hole, Wyoming. Treasuries fell after Kansas City Fed President Esther George said that the Fed should not have cut the rates last month but rebounded on economic data. Minutes from the July FOMC meeting showed yesterday that the Fed officials saw the rate cut as an insurance policy against headwinds from too-weak inflation and the risk of a deeper slump in business investment. The widely watched 2-Year and 10-Year US treasury yield curve briefly inverted yesterday after the minutes were released. ECB also released their minutes which showed concerns regarding their ability to revive inflation, and most European bonds fell as a key gauge of German manufacturing sector showed orders are dropping at the fastest pace in six years. Elsewhere, WTI crude edged higher from the previous session, trading slightly below $56 a barrel this morning.

Initial Jobless Claims and Continuing Claims displayed strength in labor market, printing 209k and 1674k following upwardly revised prior of 221k and 1728, respectively. Bloomberg Consumer Comfort edged higher to 61.50 from 61.20 prior. Markit Us Manufacturing PMI, however, lowered to 49.90 form 50.40 prior vs. 50.50 consensus and Services PMI also declined to 50.90 from 53.00 prior vs. 52.80 consensus, dampening the sentiment set by the claims data. Lastly, Leading Index in July rose to 0.50% from an upwardly revised prior of -0.10%. Later today, the US Treasury is scheduled to auction off $55 billion of 4-week bills and $40 billion of 8-week bills at 8:30 AM (PT), and $7 billion of 30-year TIPS reopening at 10:00 AM (PT). Fed Chair Powell is scheduled to speak on the challenges for monetary policy tomorrow at 7:00 AM (PT) with analysts expecting him to suggest that the Fed is ready to reduce rates further.

The curve has bull-flattened with UST 10-Year yield down 0.85 bp.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  08/19 No Data - - - - - -  
                   
  08/20 No Data - - - - - -  
                   
  08/21 MBA Mortgage Applications 04:00 16 Aug - -0.90% 21.70% -  
                   
  08/21 Existing Home Sales 07:00 Jul 5.40m 5.42m 5.27m 5.29m  
                   
  08/21 Existing Home Sales MoM 07:00 Jul 2.50% 2.50% -1.70% -1.30%  
                   
  08/21 FOMC Meeting Minutes 11:00 31 Jul - - - -  
                   
  08/22 Initial Jobless Claims 05:30 17 Aug 216k 209k 220k 221k  
                   
  08/22 Continuing Claims 05:30 10 Aug 1707k 1674k 1726k 1728k  
                   
  08/22 Bloomberg Consumer Comfort 06:45 18 Aug - 61.50 61.20 -  
                   
  08/22 Markit US Services PMI 06:45 Aug P 52.80 50.90 53.00 -  
                   
  08/22 Markit US Composite PMI 06:45 Aug P - 50.90 52.60 -  
                   
  08/22 Leading Index 07:00 Jul 0.30% 0.50% -0.30% -0.10%  
                   
  08/22 Kansas City Fed ManfActivity 08:00 Aug 1.00 - -1.00 -  
                   
  08/23 New Home Sales 07:00 Jul 649k - 646k -  
                   
  08/23 New Home Sales MoM 07:00 Jul 0.50% - 7.00% -
                   
 
 
 
 
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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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