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Market Commentary

Market Commentary


Today's Coupons
  10-Year Notes   97-18.5 (+06.5)  
  FN 2.5% Coupon   105-07 (+01.5)  
  Support   0.943%  
  Resistance   0.716%  
  Wednesday, February 10, 2021

Treasury Yields Drop as Inflation Meets Expectations

Market opened today's session with treasuries higher across all maturities. 10-year Treasury yield is at 1.1362, 2.06 bps decreased from prior closing of 1.1568.

US stocks opened mixed this morning as inflation remained front and center in investor minds. Notable early movers include Twitter Inc., which saw share prices increase following an increase in reported revenue. Lyft Inc. also saw shares rise as the company anticipates to turn a profit this year. Elsewhere, platinum prices increased to a six year high, all the while, Bitcoin dropped below $45,000. WTI crude increased by 0.6%, towards $58.73 a barrel, meanwhile Gold lowered by 0.1% towards $1,836.45 an ounce. On the economic front, MBA Mortgage Applications for the week ending February five, decreased by 4.10%. Today's figure follows last week's reported increase of 8.10%. Notably, purchases and refi's were both down by 4.70% and 4.20%, respectively. Refi's accounted for 70.20% of all loans, with the average 30 year fixed rate standing at 2.96%. CPI MoM reported in-line with expectations of a 0.30% increase. Today's figure is 1.40% higher than what was reported a year ago, when excluding for volatile components such as food and energy related costs. Markets continue to expect higher inflation going forward, and when coupled with Federal Reserve Chair Jerome Powell's willingness to let inflation take its course and potentially run above 2% for a period of time, policy makers are expected to maintain interest rates near zero in the foreseeable future. Notably, continued, high unemployment presents a headwind for inflation, with lower worker wages limiting the degree by which inflation can pick up. Elsewhere, Wholesale Inventories MoM increased more than expected, reporting at 0.30% for the month of December. Reporting tomorrow are Initial Jobless Claims, with expectations set at 758K claims for the week ending February six.

The curve has bull-flattened with UST 10-Year yield down 2.06 bps.

This Week's Events
  02/09 NFIB Small Business Optimism 03:00 Jan 97.00 95.00 95.90 -  
  02/09 JOLTS Job Openings 07:00 Dec 6400 6646 6527 6572  
  02/10 MBA Mortgage Applications 04:00 5 Feb - -4.10% 8.10% -  
  02/10 CPI MoM 05:30 Jan 0.30% 0.30% 0.40% 0.20%  
  02/10 CPI YoY 05:30 Jan 1.50% 1.40% 1.40% -  
  02/10 CPI Index NSA 05:30 Jan 261.800 261.582 260.474 -  
  02/10 CPI Core Index SA 05:30 Jan 270.592 270.025 270.117 269.940  
  02/11 Initial Jobless Claims 05:30 6 Feb 758k - 779k -  
  02/11 Continuing Claims 05:30 30 Jan 4420k - 4592k -  
  02/11 Bloomberg Consumer Comfort 06:45 7 Feb - - 44.60 -  
  02/12 U. of Mich. Sentiment 07:00 Feb P 80.90 - 79.00 -
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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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