Treasuries are slightly higher across the curve this morning from yesterday’s close. The UST10-Year yield is currently at 3.082% after closing at 3.097% prior.
Treasuriesrose overnight and are marginally higher early into today’s session ahead of the FOMC rate decision at 11:00 AM (PT) as investors prepare for the outlook of the Fed dots and rate forecasts. With the third hike of 2018 already priced in, investors will try to gauge the language of the Fed’s Official Statement and Fed Chairman Powell’s tone in his press conference following the policy decision. There have been increased speculations that the Fed will bolster expectations for a fourth rate hike in December, and that it will continue its gradual policy tightening in 2019. Fed Chairman Powell is also expected to speak on the effect of the U.S. – China trade war as he discusses the economic outlook.
On the economic calendar, we received the MBA Mortgage Applications for the week ended September 21 which rose 2.90% following an increase of 1.60% in activities the week prior. Purchase applications were up 2.60% after rising just 0.30% the week prior, while refinancing applications increased 3.20% following a 3.70% increase the week prior. We also received the August New Home Sales reports which rose 3.50% MoM to 629k rate following a revised drop of 1.60% to 608k rate the month prior. Consensus called for the unit rate to increase to 630k MoM so the August data came in slightly lower than expected. Later today at 10:00 AM (PT), U.S. will sell $31 billion 7-Year Notes.
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Treasuries rose overnight and are marginally higher early into today’s session ahead of the FOMC rate decision at 11:00 AM (PT) as investors prepare for the outlook of the Fed dots and rate forecasts. With the third hike of 2018 already priced in, investors will try to gauge the language of the Fed’s Official Statement and Fed Chairman Powell’s tone in his press conference following the policy decision. There have been increased speculations that the Fed will bolster expectations for a fourth rate hike in December, and that it will continue its gradual policy tightening in 2019. Fed Chairman Powell is also expected to speak on the effect of the U.S. – China trade war as he discusses the economic outlook.
On the economic calendar, we received the MBA Mortgage Applications for the week ended September 21 which rose 2.90% following an increase of 1.60% in activities the week prior. Purchase applications were up 2.60% after rising just 0.30% the week prior, while refinancing applications increased 3.20% following a 3.70% increase the week prior. We also received the August New Home Sales reports which rose 3.50% MoM to 629k rate following a revised drop of 1.60% to 608k rate the month prior. Consensus called for the unit rate to increase to 630k MoM so the August data came in slightly lower than expected. Later today at 10:00 AM (PT), U.S. will sell $31 billion 7-Year Notes.
The curve has bull-flattened with the UST 10-Year yield down 1.5 bps from prior closing.