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Market Commentary

Market Commentary

December 24, 2014
10-YEAR NOTES   99-20 (-08)
FN 3.5% COUPON   103-20 (-02)
SUPPORT   2.42%
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MBA Mortgage Applications, for the week that ended December 19th, rose +0.9% vs. -3.3% prior (+3.8% YoY). Purchases rose +1.3% vs. -6.9% prior (-0.9% YoY), Refinancing rose +1.1% following a flat reading prior (+6.3% YoY) and the average interest rate for a 30-Year conventional conforming loan fell -4 bps to 4.02% (4.64% a year ago). Jobless Claims dropped by -9K to 280K vs. 289K prior, for the week that ended December 20, the fewest since November. Continuing Claims rose to 2403K vs. 2373K prior.
Yesterday 10-Year notes sold-off in response to the hotter than expected GDP print, pushing yields to 2.258, up +9.5 bps from the prior day's close. The coupon stack de-compressed, widening roughly 2-5 ticks in the production coupons, and MBS outperformed treasury hedges by 2-6 ticks. The curve bear steepened with 2s10s up +7.0 bps to 152.3, with the 20-day average at 162.1. 2s30s are coming off the prior day's lows, up 7.9 bps to 211.9. The 30-Year current coupon rose +8.0 bps on the day to 2.91% vs. 2.83% prior and the 15-Year followed suit, up +9.0 bps to 2.17% vs. 2.08% prior. The G2/FN swap widened 2-3 ticks in the belly along 3.0s through 4.5s with the G2/FN 3.5 swap at 0-21+ vs. 0-192 prior. Today treasuries are opening lower on the better than expected claims data, and 2s10s is currently +2.8 bps steeper with MBS outperforming in the higher coupons.  
Happy Holidays!
Today's Events:
12/24 MBA Mortgage Applications 04:00 December 19 - 0.9% -3.3% -
12/24 Initial Jobless Claims 05:30 December 20 290K 280K 289K -
12/24 Continuing Claims 05:30 December 13 2375K 2403K 2373K 2378K
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This information is provided solely for informational use and is not intended as a trading or investment advice in any manner whatsoever. Sun West Mortgage Company, Inc. is not liscensed or registered broker or dealer and cannot provide investment strategies or recommendations. This information is provided to 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, price, guidelines, fees, costs, terms and conditions are subject to change without notice.