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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   97-28.5 (+08)  
  FN 2.5% Coupon   104-26 (+01.5)  
  Support   0.902%  
  Resistance   0.658%  
  Wednesday, January 13, 2021

Treasury Yields Fall as MBA Mortgage Applications Jump by 16.7%

Market opened today's session with treasuries higher across all maturities. 10-year Treasury yield is at 1.1002, 2.89 bps decreased from prior closing of 1.1291.

US stocks opened higher this morning, once again hovering near record highs. Notable early movers include Intel Corp., which saw shares rise after announcing Pat Gelsinger will be replacing Bob Swan as CEO, consequentially also driving down shares in Advanced Micro Devices. The Federal Reserve Bank's President James Bullard ensured the pandemic remained a priority in Fed policy, alleviating fears of a return to 2013's taper tantrum, which led to large amounts of volatility across markets. In Europe, ECB governing council member Francois Villeroy de Galhau expressed a similar take, countering the possibility of bond tapering any time soon. Elsewhere, WTI Crude dropped by 0.7% to $52.81 a barrel, meanwhile Silver fell by 0.4% to $25.45 an ounce. On the economic front, MBA Mortgage Applications increased by 16.70% for the week ending January 8, a significant jump from the prior reported value of 1.70%. Notably, refi's increased by 20.10% in comparison to last week's 3.00% increase, in addition to which purchases increased by 8.00% after noting a decline of 1.60% a week prior. With refi's composing 74.8% of all loans, the average 30 year fixed rate stood at 2.88%. CPI MoM matched expectations this morning after reporting an increase of 0.4%. With consumer prices rising at the fastest pace in four months, food prices saw the largest inflation gains with restaurants and groceries leading the trend. With increases in household income remaining bleak going into 2021, fiscal stimulus and prospects of further aid continue to provide a cushion, with headwinds remaining in low labor-participation. Reporting tomorrow are Initial Jobless Claims, with expectations set at 786K.

The curve has bull-flattened with UST 10-Year yield down 2.89 bps.

This Week's Events
  01/12 NFIB Small Business Optimism 03:00 Dec 100.20 95.90 101.40 -  
  01/12 JOLTS Job Openings 07:00 Nov 6450 6527 6652 6632  
  01/13 MBA Mortgage Applications 04:00 8 Jan - 16.70% 1.70% -  
  01/13 CPI MoM 05:30 Dec 0.40% 0.40% 0.20% -  
  01/13 CPI YoY 05:30 Dec 1.30% 1.40% 1.20% -  
  01/13 CPI Index NSA 05:30 Dec 260.401 260.474 260.229 -  
  01/13 CPI Core Index SA 05:30 Dec 270.243 270.117 269.887 -  
  01/14 Initial Jobless Claims 05:30 9 Jan 786k - 787k -  
  01/14 Continuing Claims 05:30 2 Jan 5000k - 5072k -  
  01/14 Bloomberg Consumer Comfort 06:45 10 Jan - - 44.40 -  
  01/15 PPI Final Demand MoM 05:30 Dec 0.40% - 0.10% -  
  01/15 PPI Final Demand YoY 05:30 Dec 0.80% - 0.80% -  
  01/15 U. of Mich. Sentiment 07:00 Jan P 79.80 - 80.70 -
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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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