Treasuries are modestly lower across the curve this morning from yesterday's close. The UST10-Year yield is currently at 2.305% after closing at 2.237% prior.
Treasuriessold off overnight and into the open as investors digested Fed Chairwoman Yellen's comments yesterday that bolstered the expectation of a third interest rate hike this year in December. Yellen acknowledged the recent run of weak inflation reports, but stated that even if it continues to stay below their 2.00% target, there could be danger in tightening the monetary policy “too gradually”. The busy week of Fedspeak continues today with Fed Kashkari at 6:15 AM (PT), Fed Bullard at 10:30 AM (PT), Fed Brainard at 11:00 AM (PT), and Fed Rosengren at 4:00 PM (PT).
In economic news, we received the Mortgage Applications for the week ending on September 22nd which fell 0.50% following a 9.70% drop the week prior. Purchase applications rose 2.80% after falling 10.80% the week prior, while refinancing activities dropped 3.50% after falling 8.50% the week prior. We also received the Durable Goods Orders for August, which rose 1.70% following a 6.80% drop prior; Durables Excluding Transportation rose 0.20% as expected. Lastly, we received the Pending Home Sales for August which dropped 2.60% MoM following a 0.80% drop in July. Pending Home SalesYoY is down 3.10%, which came in below an expected drop of 0.50% per consensus.
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Treasuries sold off overnight and into the open as investors digested Fed Chairwoman Yellen's comments yesterday that bolstered the expectation of a third interest rate hike this year in December. Yellen acknowledged the recent run of weak inflation reports, but stated that even if it continues to stay below their 2.00% target, there could be danger in tightening the monetary policy “too gradually”. The busy week of Fedspeak continues today with Fed Kashkari at 6:15 AM (PT), Fed Bullard at 10:30 AM (PT), Fed Brainard at 11:00 AM (PT), and Fed Rosengren at 4:00 PM (PT).
In economic news, we received the Mortgage Applications for the week ending on September 22nd which fell 0.50% following a 9.70% drop the week prior. Purchase applications rose 2.80% after falling 10.80% the week prior, while refinancing activities dropped 3.50% after falling 8.50% the week prior. We also received the Durable Goods Orders for August, which rose 1.70% following a 6.80% drop prior; Durables Excluding Transportation rose 0.20% as expected. Lastly, we received the Pending Home Sales for August which dropped 2.60% MoM following a 0.80% drop in July. Pending Home Sales YoY is down 3.10%, which came in below an expected drop of 0.50% per consensus.
The curve has bear-steepened with the UST 10-Year up 6.8 bps from prior closing.