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Market Commentary


 
Today's Coupons
 
  10-Year Notes   101-31.5 (-04)  
 
  FN 3.5% Coupon   98-24 (00)  
 
  Support   3.237%  
 
  Resistance   2.829%  
 
 
 
 
Wednesday, December 12, 2018
 
 
Treasuries are lower across the curve this morning from yesterday’s close. The UST 10-Year yield is currently at 2.894% after closing at 2.880% prior.

Treasuries were steadily lower overnight while global stocks rallied on positive outlook for trade talks as tensions eased between U.S. and China. Along with reports that China would cut tariffs on U.S. autos, the chief financial officer of Huawei Technologies was granted bail. President Trump added that he would consider intervening in the case if it helps get a trade deal done with China. Elsewhere, the pound surged the most in a month as Prime Minister May vowed to contest the vote of confidence. While developments on trade and Brexit remain in focus, investors are also tracking the risk of a partial U.S. government shutdown as President Trump remains at odds with Democratic leaders in Congress over funding for a border wall with Mexico. Meanwhile, the dollar remained weaker as U.S. inflation came in line with expectations in November.

Headline CPI was unchanged in November following a 0.30% increase prior, pushing the year-over-year rate down to 2.20% as expected from 2.50% prior. CPI excluding food and energy rose 0.20% month-over-month to bring the year-over-year rate to 2.20% from 2.10% prior. The economic calendar also featured the MBA Mortgage Applications for the week ended December 7 which rose for a third consecutive week and gained 1.60% following a 2.00% increase the week prior. Purchase applications were up 2.50% after rising 0.80% in the prior week, and refinancing activities increased 1.80% following a 6.20% gain prior. Later today at 10:00 AM (PT), U.S. will sell $24 Billion 10-Year Notes Reopening. Then at 11:00 AM (PT), the Monthly Budget Statement for the month of November will be released with the deficit expected to widen to $199.00 Billion from $100.50 Billion prior.

The curve has bear-steepened with the UST 10-Year yield up 1.4 bps from prior closing.
 
 
   
 
   
 
This Week's Events
 
 
  DATE EVENT TIME(PT) PERIOD SURVEY ACTUAL PRIOR REVISED  
  12/10 JOLTS Job Openings 07:00 Oct 7100 7079 7009 6960  
                   
  12/11 NFIB Small Business Optimism 03:00 Nov 107.00 104.80 107.40 -  
                   
  12/11 PPI Final Demand MoM 05:30 Nov 0.00% 0.10% 0.60% -  
                   
  12/11 PPI Final Demand YoY 05:30 Nov 2.50% 2.50% 2.90% -  
                   
  12/12 MBA Mortgage Applications 04:00 7 Dec - 1.60% 2.00% -  
                   
  12/12 CPI MoM 05:30 Nov 0.00% 0.00% 0.30% -  
                   
  12/12 CPI YoY 05:30 Nov 2.20% 2.20% 2.50% -  
                   
  12/12 Monthly Budget Statement 11:00 Nov -$199.00b - -$100.50b -  
                   
  12/13 Import Price Index MoM 05:30 Nov -1.00% - 0.50% -  
                   
  12/13 Import Price Index YoY 05:30 Nov 1.30% - 3.50% -  
                   
  12/13 Export Price Index MoM 05:30 Nov -0.30% - 0.40% -  
                   
  12/13 Export Price Index YoY 05:30 Nov - - 3.10% -  
                   
  12/13 Initial Jobless Claims 05:30 8 Dec 226k - 231k -  
                   
  12/13 Continuing Claims 05:30 1 Dec 1649k - 1631k -  
                   
  12/13 Bloomberg Consumer Comfort 06:45 9 Dec - - 60.30 -  
                   
  12/14 Retail Sales Advance MoM 05:30 Nov 0.10% - 0.80% -  
                   
  12/14 Industrial Production MoM 06:15 Nov 0.30% - 0.10% -  
                   
  12/14 Capacity Utilization 06:15 Nov 78.6% - 78.40% -  
                   
  12/14 Markit US Services PMI 06:45 Dec P 54.60 - 54.70 -  
                   
  12/14 Business Inventories 07:00 Oct 0.60% - 0.30% -  
                   
 
 
 
 
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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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