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Market Commentary


 
Today's Coupons
 
  10-Year Notes   97-21.5 (-09)  
 
  FN 3.5% Coupon   97-11 (-05.5)  
 
  Support   3.233%  
 
  Resistance   3.028%  
 
 
 
 
Wednesday, October 31, 2018
 
 
Treasuries are lower across the curve this morning from yesterday’s close. The UST 10-Year yield is currently at 3.158% after closing at 3.124% prior.

Treasuries extended losses overnight and kicked off the session weaker while U.S. equity futures advanced supported by strong corporate earnings. U.S. stocks extended yesterday’s late rally as company results from Facebook, General Motors, GlaxoSmithKline and Sprint among others exceeded earnings expectations. Moreover, the Treasury Department announced to increase the amount of long-term debt it will sell this quarter; treasury yields climbed higher on the announcement. This morning we received solid October Private Payrolls data which moved treasuries even lower while lifting the dollar as investor nerves regarding the strength of the economy calmed. Elsewhere, the Bank of Japan announced to keep its current policy unchanged and trimmed its inflation forecast to reflect below-target inflation through at least the 2020 fiscal year.

The October ADP Employment Change reported that U.S. companies added more workers than expected. Private Payrolls rose by 227k for the month versus an expected 187k gain per consensus; its prior mark was revised lower from 230k to 218k. Also on the calendar, we received the MBA Mortgage Applications for the week ended October 26 which fell 2.50% after increasing 4.90% the week prior. Purchase applications dropped 1.50% after gaining 2.00% the week prior, while refinancing activities slowed 3.80% after a 9.70% increase the week prior. We also received the 3Q Employment Cost Index which rose 0.80% following a 0.60% gain in 2Q. The index indicates that an upward pressure on employment costs continues to gradually increase. Lastly on the calendar, we received the Chicago Purchasing Manager which slipped back in October to 58.40 from a reading of 60.4 prior.

The curve has bear-steepened with the UST 10-Year yield up 3.4 bps from prior closing.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  10/29 Personal Income 05:30 Sep 0.40% 0.20% 0.30% 0.40%  
                   
  10/29 Personal Spending 05:30 Sep 0.40% 0.40% 0.30% 0.50%  
                   
  10/29 PCE Deflator MoM 05:30 Sep 0.10% 0.10% 0.10% -  
                   
  10/29 PCE Deflator YoY 05:30 Sep 2.00% 2.00% 2.20% -  
                   
  10/29 PCE Core MoM 05:30 Sep 0.10% 0.20% 0.00% -  
                   
  10/29 PCE Core YoY 05:30 Sep 2.00% 2.00% 2.00% -  
                   
  10/29 Dallas Fed Manf. Activity 07:30 Oct 28.10 29.40 28.10 -  
                   
  10/30 S&P CoreLogic CS 20-City MoM SA 06:00 Aug 0.10% 0.09% 0.09% 0.07%  
                   
  10/30 S&P CoreLogic CS 20-City YoY NSA 06:00 Aug 5.80% 5.49% 5.92% 5.90%  
                   
  10/31 MBA Mortgage Applications 04:00 26 Oct - -2.50% 4.90% -  
                   
  10/31 ADP Employment Change 05:15 Oct 187k 227k 230k 218k  
                   
  11/01 Challenger Job Cuts YoY 04:30 Oct - - 70.90% -  
                   
  11/01 Nonfarm Productivity 05:30 3Q P 2.10% - 2.90% -  
                   
  11/01 Unit Labor Costs 05:30 3Q P 1.10% - -1.00% -  
                   
  11/01 Initial Jobless Claims 05:30 27 Oct 212k - 215k -  
                   
  11/01 Continuing Claims 05:30 20 Oct 1640k - 1636k -  
                   
  11/01 Bloomberg Consumer Comfort 06:45 28 Oct - - 60.10 -  
                   
  11/01 Markit US Manufacturing PMI 06:45 Oct F 55.80 - 55.90 -  
                   
  11/01 Construction Spending MoM 07:00 Sep 0.00% - 0.10% -  
                   
  11/01 ISM Manufacturing 07:00 Oct 59.00 - 59.80 -  
                   
  11/01 ISM Prices Paid 07:00 Oct 69.00 - 66.90 -  
                   
  11/02 Trade Balance 05:30 Sep -$53.60b - -$53.20b -  
                   
  11/02 Change in Nonfarm Payrolls 05:30 Oct 195k - 134k -  
                   
  11/02 Unemployment Rate 05:30 Oct 3.70% - 3.70% -  
                   
  11/02 Average Hourly Earnings MoM 05:30 Oct 0.20% - 0.30% -  
                   
  11/02 Average Hourly Earnings YoY 05:30 Oct 3.20% - 2.80% -  
                   
  11/02 Labor Force Participation Rate 05:30 Oct 62.70% - 62.70% -  
                   
  11/02 Factory Orders 07:00 Sep 0.50% - 2.30% -  
                   
  11/02 Durable Goods Orders 07:00 Sep F - - 0.80% -  
                   
  11/02 Durables Ex Transportation 07:00 Sep F - - 0.10% -  
                   
 
 
 
 
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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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