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Market Commentary


 
Today's Coupons
 
  10-Year Notes   97-28.5 (+12)  
 
  FN 3.5% Coupon   97-18.5 (+06.5)  
 
  Support   3.233%  
 
  Resistance   2.948%  
 
 
 
 
Wednesday, October 24, 2018
 
 
Treasuries are moderately higher across the curve this morning from yesterday’s close. The UST 10-Year yield is currently at 3.127% after closing at 3.169% prior.

Treasuries gained overnight and opened higher for the second straight session despite positive earnings results that helped U.S. stocks erase some of yesterday’s losses. The Dow Jones gained the most among major indices after Boeing, its most heavily-weighted component, topped analysts’ estimates. Elsewhere, Fed Officials delivered more hawkishness yesterday as Atlanta Fed President Bostic and Dallas Fed President Kaplan both made supporting statements for further gradual rate increases to a neutral setting, while suggesting that the next one could be in December. Meanwhile, President Trump took another swipe at Fed Chairman Powell during an interview late yesterday stating that Powell has threatened U.S. economic growth by raising interest rates, and that he maybe regrets nominating Powell as Chairman. More Fed Officials are scheduled to speak today including St. Louis Fed President Bullard, Cleveland Fed President Mester, Atlanta Fed President Bostic, and Fed Board of Governors member Brainard.

On the economic calendar, we received the MBA Mortgage Applications for the week ended October 19 which rose 4.90% after falling 7.10% the week prior. Purchase applications were up 2.00% after falling 5.90% the week prior, while refinancing activities increased 9.70% after dropping 9.00% the week prior. We also received the August FHFA House Price Index which met expectations and showed that home prices rose 0.30% MoM. The calendar also included the September New Home Sales data which fell 5.50% to a 553k unit rate following a downwardly revised 3.00% decline to a 585k unit rate prior. Lastly, we received the preliminary reading of the Markit US reports for October; Manufacturing PMI rose to 55.90 from 55.60 prior, Services PMI rose to 54.70 from 53.50 prior, and Composite PMI rose to 54.80 from 53.90 prior. Later today at 10:00 AM (PT), U.S. will sell $39 Billion 5-Year Notes. Then at 11:00 AM (PT), the Fed’s latest Beige Book will be available to summarize the Fed’s views on current economic conditions.

The curve has bull-flattened with the UST 10-Year yield down 4.2 bps from prior closing.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  10/22 Chicago Fed Nat Activity Index 05:30 Sep 0.21 0.17 0.18 0.27  
                   
  10/23 Richmond Fed Manufact. Index 07:00 Oct 24.00 15.00 29.00 -  
                   
  10/24 MBA Mortgage Applications 04:00 19 Oct - 4.90% -7.10% -  
                   
  10/24 FHFA House Price Index MoM 06:00 Aug 0.30% 0.30% 0.20% 0.40%  
                   
  10/24 Markit US Manufacturing PMI 06:45 Oct P 55.30 55.90 55.60 -  
                   
  10/24 Markit US Services PMI 06:45 Oct P 54.00 54.70 53.50 -  
                   
  10/24 Markit US Composite PMI 06:45 Oct P - 54.80 53.90 -  
                   
  10/24 New Home Sales 07:00 Sep 625k 553k 629k 585k  
                   
  10/24 New Home Sales MoM 07:00 Sep -0.60% -5.50% 3.50% -3.00%  
                   
  10/24 U.S. Federal Reserve Releases Beige Book 11:00 - - - - -  
                   
  10/25 Wholesale Inventories MoM 05:30 Sep P 0.50% - 1.00% -  
                   
  10/25 Durable Goods Orders 05:30 Sep P -1.50% - 4.40% -  
                   
  10/25 Durables Ex Transportation 05:30 Sep P 0.40% - 0.00% -  
                   
  10/25 Initial Jobless Claims 05:30 20 Oct 215k - 210k -  
                   
  10/25 Continuing Claims 05:30 13 Oct 1644k - 1640k -  
                   
  10/25 Bloomberg Consumer Comfort 06:45 21 Oct - - 60.80 -  
                   
  10/25 Pending Home Sales MoM 07:00 Sep 0.00% - -1.80% -  
                   
  10/25 Pending Home Sales NSA YoY 07:00 Sep -1.90% - -2.50% -  
                   
  10/25 Kansas City Fed Manf. Activity 08:00 Oct 14.00 - 13.00 -  
                   
  10/26 GDP Annualized QoQ 05:30 3Q A 3.40% - 4.20% -  
                   
  10/26 Personal Consumption 05:30 3Q A 3.30% - 3.80% -  
                   
  10/26 GDP Price Index 05:30 3Q A 2.10% - 3.00% -  
                   
  10/26 Core PCE QoQ 05:30 3Q A 1.70% - 2.10% -  
                   
  10/26 U. of Mich. Sentiment 07:00 Oct F 99.00 - 99.00 -  
                   
 
 
 
 
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  This information is provided solely for informational use and is not intended as trading or investment advice 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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