Treasuries are marginally higher across the curve this morning from yesterday's close. The UST10-Year yield is currently at 3.200% after closing at 3.206% prior.
Treasuries edged lower overnight as investors continued to digest the tone of the Fed's latest FOMC Minutes that was released mid-session yesterday. The minutes reaffirmed that Fed Officials are in favor of further gradual rate increases and appeared to support an eventual move in rates beyond the neutral level for the economy. Treasuries fell lower towards the end of yesterday's session as the tone showed consistency with the Fed's intent for a fourth rate hike at the end of the year. The Fed remains in focus today with two Fed Officials scheduled to speak including St. Louis Fed President Bullard who will discuss the U.S. economic outlook in Memphis, and Fed Vice Chairman Quarles who will also speak on the economic outlook in New York. Later today at 10:00 AM (PT), U.S. will sell 30-Year TIPS Reopening.
On the economic calendar, we received the October Philadelphia Fed Business Outlook which dropped less than expected from 22.90 prior to 22.20; market consensus expected the index to drop to 20.00. Also received, the Bloomberg Economic Expectations Index rose to a 16-year high of 58.50 in October from 57.05 prior. Moreover, Initial Jobless Claims for the week ended October 13 fell 5k to 210k from a slightly revised 215k the week prior as the claims continue its impressive showing of a tightening labor market. Continuing Claims for the week ended October 6 fell 13k to 1640k from a downwardly revised 1653k the week prior; consensus called for continuing claims to rise to 1663k for the week. Lastly, we received the September Leading Index which rose 0.50% as expected following a 0.40% increase prior.
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Treasuries edged lower overnight as investors continued to digest the tone of the Fed's latest FOMC Minutes that was released mid-session yesterday. The minutes reaffirmed that Fed Officials are in favor of further gradual rate increases and appeared to support an eventual move in rates beyond the neutral level for the economy. Treasuries fell lower towards the end of yesterday's session as the tone showed consistency with the Fed's intent for a fourth rate hike at the end of the year. The Fed remains in focus today with two Fed Officials scheduled to speak including St. Louis Fed President Bullard who will discuss the U.S. economic outlook in Memphis, and Fed Vice Chairman Quarles who will also speak on the economic outlook in New York. Later today at 10:00 AM (PT), U.S. will sell 30-Year TIPS Reopening.
On the economic calendar, we received the October Philadelphia Fed Business Outlook which dropped less than expected from 22.90 prior to 22.20; market consensus expected the index to drop to 20.00. Also received, the Bloomberg Economic Expectations Index rose to a 16-year high of 58.50 in October from 57.05 prior. Moreover, Initial Jobless Claims for the week ended October 13 fell 5k to 210k from a slightly revised 215k the week prior as the claims continue its impressive showing of a tightening labor market. Continuing Claims for the week ended October 6 fell 13k to 1640k from a downwardly revised 1653k the week prior; consensus called for continuing claims to rise to 1663k for the week. Lastly, we received the September Leading Index which rose 0.50% as expected following a 0.40% increase prior.
The curve has bull-flattened with the UST 10-Year yield down 0.6 bp from prior closing.