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Market Commentary


 
Today's Coupons
 
  10-Year Notes   98-10.5 (+06.5)  
 
  FN 3.5% Coupon   102-13 (+01.5)  
 
  Support   3.237%  
 
  Resistance   1.529%  
 
 
 
 
Wednesday, October 30, 2019
 
 
Treasury Yields Decline - Federal Reserve Meets Today to Discuss Rate Cut
 
 
Market opened today’s session with treasuries rallying across all maturities. The 10-Year Treasury yield is currently at 1.8103, 2.82 bps decreased from prior closing of 1.8385.

The Dow Jones gained 0.10% at the open, the S&P 500 and Nasdaq Composite showed little change. The Federal Reserve is scheduled to meet today to discuss another possible rate cut. If approved, this will be the Central Banks third rate cut of 2019. Federal Reserve Chairman Jerome Powell will make the announcement today at 11:00 AM (PT). In a recent comment to the press, Treasury Secretary Steven Mnuchin stated the government is considering releasing 50-year bonds in an attempt to finance some of the countrys debt, which continues to grow at an alarming rate. Currently, the federal deficit increased to $984 billion for the fiscal year of 2019, the countrys highest level in seven years. Gold increased 0.20% to $1,490.15 an ounce. Meanwhile, West Texas Intermediate crude oil fell 0.40% to $55.31 a barrel. The yield on 10-Year Treasuries increased one basis point to 1.85%. The US Treasury will offer $55 billion and $40 billion at its weekly auction of four-week bills and eight-week bills, respectively.

The ADP Research Institute published a report that showed businesses’ payrolls increased by 125,000, which exceeded expectations. This report also detailed that goods-producing jobs were down by 13,000 as payrolls for mining, construction, and manufacturing decreased. Service-provider employment increased by 138,000 due to education and health services, trade, and transportation services. The ADP Research Institute also showed hiring at small businesses grew by about 17,000 and large businesses added 44,000 to payrolls. Yesterday, the Department of Commerce released data that reflected an increase of 1.90% in gross domestic product. However, the GDP is still at its lowest since the end of 2018. Consumer spending increased 2.90%, exceeding analysts’ expectations. The manufacturing sector continues to decline, hitting a 10 year low. Mortgage refinance applications declined 1.00% last week, but were still 134% higher than their levels a year ago. Applications to purchase a home increased 2.00% last week, and 10.00% year-to-date.

The curve has bull-flattened with the UST 10-Year yield down 2.82 bps from prior closing.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  10/28 Chicago Fed Nat Activity Index 05:30 Sep 0.00 -0.45 0.10 0.15  
                   
  10/28 Wholesale Inventories MoM 05:30 Sep P 0.20% -0.30% 0.20% 0.00%  
                   
  10/28 Dallas Fed ManfActivity 07:30 Oct 1.00 - 1.50 -  
                   
  10/29 S&P CoreLogic CS 20-City MoM SA 06:00 Aug -0.10% -0.16% 0.02% 0.04%  
                   
  10/29 S&P CoreLogic CS 20-City YoY NSA 06:00 Aug 2.10% 2.03% 2.00% 2.03%  
                   
  10/29 Pending Home Sales MoM 07:00 Sep 0.90% 1.50% 1.60% 1.40%  
                   
  10/29 Pending Home Sales NSA YoY 07:00 Sep 3.60% 6.30% 1.10% 1.00%  
                   
  10/30 MBA Mortgage Applications 04:00 25 Oct - 0.60% -11.90% -  
                   
  10/30 ADP Employment Change 05:15 Oct 110k 125k 135k 93k  
                   
  10/30 GDP Annualized QoQ 05:30 3Q A 1.60% 1.90% 2.00% -  
                   
  10/30 Personal Consumption 05:30 3Q A 2.60% 2.90% 4.60% -  
                   
  10/30 GDP Price Index 05:30 3Q A 1.90% 1.70% 2.40% -  
                   
  10/30 Core PCE QoQ 05:30 3Q A 2.20% 2.20% 1.90% -  
                   
  10/30 FOMC Rate Decision (Upper Bound) 11:00 30 Oct 1.75% - 2.00% -  
                   
  10/30 FOMC Rate Decision (Lower Bound) 11:00 30 Oct 1.50% - 1.75% -  
                   
  10/31 Challenger Job Cuts YoY 04:30 Oct - - -24.80% -  
                   
  10/31 Personal Income 05:30 Sep 0.30% - 0.40% -  
                   
  10/31 Personal Spending 05:30 Sep 0.30% - 0.10% -  
                   
  10/31 PCE Deflator MoM 05:30 Sep 0.00% - 0.00% -  
                   
  10/31 PCE Deflator YoY 05:30 Sep 1.40% - 1.40% -  
                   
  10/31 Initial Jobless Claims 05:30 26 Oct 215k - 212k -  
                   
  10/31 Continuing Claims 05:30 19 Oct 1679k - 1682k -  
                   
  10/31 Bloomberg Consumer Comfort 06:45 27 Oct - - 63.40 -  
                   
  11/01 Change in Nonfarm Payrolls 05:30 Oct 85k - 136k -  
                   
  11/01 Unemployment Rate 05:30 Oct 3.60% - 3.50% -  
                   
  11/01 Average Hourly Earnings MoM 05:30 Oct 0.30% - 0.00% -  
                   
  11/01 Average Hourly Earnings YoY 05:30 Oct 3.00% - 2.90% -  
                   
  11/01 Labor Force Participation Rate 05:30 Oct 63.10% - 63.20% -  
                   
  11/01 Markit US Manufacturing PMI 06:45 Oct F 51.50 - 51.50 -  
                   
  11/01 ISM Manufacturing 07:00 Oct 49.00 - 47.80 -  
                   
  11/01 ISM Prices Paid 07:00 Oct 50.00 - 49.70 -  
                   
  11/01 Construction Spending MoM 07:00 Sep 0.20% - 0.10% -
                   
 
 
 
 
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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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