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Market Commentary


 
Today's Coupons
 
  10-Year Notes   101-15.5 (+07.5)  
 
  FN 3.5% Coupon   102-22.5 (+03.5)  
 
  Support   3.237%  
 
  Resistance   1.471%  
 
 
 
 
Wednesday, August 28, 2019
 
 
Treasury Yields Lower In Response To Trade Worries
 
 
Market opened today’s session with treasuries rallying across all maturities. 10-Year Treasury yield is at 1.4693, 0.18 bps decreased from prior closing of 1.4711.

Concerns about the U.S. economy are mounting as Washington gets ready to impose tariffs, effective Sept. 1, on nearly all of China’s imports. The rate on the 30-Year Treasury bond sank to a new all-time low while the U.S. yield curve inverted even further intensifying fears of a possible global recession; such an inversion has preceded every recession over the past 50 years. The spread between the 3-month Treasury yield and that of the 10-Year note sank to -54.50 basis points, its lowest level since before the financial crisis of 2008. The Fed is attempting to keep inflation around its 2% target but despite historically low interest rates, price gains have remained mild. The bond market’s inflation expectations are most evident in the yields on Treasury inflation-protected securities. The Fed will consider whether to reduce the cost of borrowing money at its September meeting - two months after cutting rates for the first time in more than a decade. The US Treasury will offer $41b at its 5-Year notes auction, the same amount as the last offering.

According to the Mortgage Application Index, mortgage applications fell 6.20% in the week of 08/23/2019. Purchases were reported down 4.00% after falling 3.50%, and refinances fell 7.60% after rising 0.40%, in the week prior. Oil prices rose as US crude inventories drop. U.S. crude stockpiles plunged by 11.10 million barrels last week as imports dropped, compared with expectations for a 2-million-barrel draw, according to the data from the American Petroleum Institute. U.S. gold futures were down 0.10% at $1,550.50 an ounce after hitting $1,554.56, its highest in over six years, on hopes of a rate cut and uncertainties around the US-China trade talks; as long as the trade issue continues, gold will be well supported. Silver gained 0.70% to $18.28 an ounce, earlier reaching $18.34 - which was its highest level since April 2017.

The curve has bull-steepened with UST 10-Year yield down 0.18 bps.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  08/26 Chicago Fed Nat Activity Index 05:30 Jul - -0.36 -0.02 -0.03  
                   
  08/26 Durable Goods Orders 05:30 Jul P 1.20% 2.10% 1.90% 1.80%  
                   
  08/26 Durables Ex Transportation 05:30 Jul P 0.00% -0.40% 0.10% 0.80%  
                   
  08/26 Dallas Fed ManfActivity 07:30 Aug -4.00 2.70 -6.30 -  
                   
  08/27 FHFA House Price Index MoM 06:00 Jun 0.20% 0.20% 0.10% 0.20%  
                   
  08/27 S&P CoreLogic CS 20-City MoM SA 06:00 Jun 0.10% 0.04% 0.14% 0.13%  
                   
  08/27 S&P CoreLogic CS 20-City YoY NSA 06:00 Jun 2.30% 2.13% 2.39% 2.37%  
                   
  08/27 Richmond Fed ManufactIndex 07:00 Aug -4.00 1.00 -12.00 -  
                   
  08/28 MBA Mortgage Applications 04:00 23 Aug - -6.20% -0.90% -  
                   
  08/29 GDP Annualized QoQ 05:30 2Q S 2.00% - 2.10% -  
                   
  08/29 Personal Consumption 05:30 2Q S 4.30% - 4.30% -  
                   
  08/29 GDP Price Index 05:30 2Q S 2.40% - 2.40% -  
                   
  08/29 Core PCE QoQ 05:30 2Q S 1.80% - 1.80% -  
                   
  08/29 Wholesale Inventories MoM 05:30 Jul P 0.20% - 0.00% -  
                   
  08/29 Initial Jobless Claims 05:30 24 Aug 214k - 209k -  
                   
  08/29 Continuing Claims 05:30 17 Aug 1687k - 1674k -  
                   
  08/29 Bloomberg Consumer Comfort 06:45 25 Aug - - 61.50 -  
                   
  08/29 Pending Home Sales MoM 07:00 Jul 0.00% - 2.80% -  
                   
  08/29 Pending Home Sales NSA YoY 07:00 Jul 1.80% - -0.60% -  
                   
  08/30 Personal Income 05:30 Jul 0.30% - 0.40% -  
                   
  08/30 Personal Spending 05:30 Jul 0.50% - 0.30% -  
                   
  08/30 PCE Deflator MoM 05:30 Jul 0.20% - 0.10% -  
                   
  08/30 PCE Deflator YoY 05:30 Jul 1.40% - 1.40% -  
                   
  08/30 U. of MichSentiment 07:00 Aug F 92.40 - 92.10 -
                   
 
 
 
 
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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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