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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   103-11.5 (+13)  
  FN 3.5% Coupon   101-24 (-14.5)  
  Support   2.612%  
  Resistance   0.336%  
  Thursday, March 19, 2020

Treasury Yields Fall as Stocks Struggle Again

Market opened today’s session with treasuries rallying across all maturities. 10-Year Treasury yield is at 1.0733, 11.82 bps decreased from prior closing of 1.1915.

Stocks continued to sell-off this morning as investors weighed the growing likelihood of a global recession and corporate defaults by unprecedented lockdowns and supply chain disruptions. Despite a slew of both economic and financial measures presented by global policy makers, those stimulus packages appeared to be not enough to curb the selling pressure in the markets. Last night, the Fed announced the reintroduction of another emergency lending facility from the 2008 financial crisis, the Money Market Mutual Fund Liquidity Facility which will make loans available secured by high quality assets purchased from money market mutual funds. The extraordinary rush to haven also continued; Treasuries rallied and the dollar strengthened for an eighth day versus its major peers to its highest in at least 15 years. WTI crude rebounded after hitting close to $20 a barrel yesterday, heading toward $23 a barrel this morning. The total confirmed cases of the coronavirus in the US has now reached 9,415 with the death toll at 150.

The fourth quarter Current Account Deficit narrowed to $109.80 billion from reviewed prior of $125.40 billion, however, came in above consensus of $108.60 billion. Philadelphia Fed Business Outlook in March plunged to -12.70 from 36.70 prior vs. 8.00 consensus. Initial Jobless Claims printed a higher than expected reading of 281k vs. 211k prior and 220k consensus. Continuing Claims, however, came in below consensus of 1738k at 1701k. Lastly, leading Index from February fell to 0.10% from a downwardly revised prior of 0.70%.

The curve has bull-flattened with UST 10-Year yield down 11.82 bps.
This Week's Events
  03/16 Empire Manufacturing 05:30 Mar 3.00 -21.50 12.90 -  
  03/16 Net Long-term TIC Flows 13:00 Jan - $20.90B $85.60B -  
  03/16 Total Net TIC Flows 13:00 Jan - $122.90B $78.20B $78.70B  
  03/17 Retail Sales Advance MoM 05:30 Feb 0.20% -0.50% 0.30% 0.60%  
  03/17 Capacity Utilization 06:15 Feb 77.10% 77.00% 76.80% 76.60%  
  03/17 JOLTS Job Openings 07:00 Jan 6400 6963 6423 6552  
  03/17 NAHB Housing Market Index 07:00 Mar 73 72 74 -  
  03/18 MBA Mortgage Applications 04:00 13 Mar - -8.40% 55.40% -  
  03/18 Housing Starts 05:30 Feb 1500k 1599k 1567k 1624k  
  03/18 Housing Starts MoM 05:30 Feb -4.30% -1.50% -3.60% 1.40%  
  03/18 Building Permits 05:30 Feb 1500k 1464k 1551k 1550k  
  03/18 Building Permits MoM 05:30 Feb -3.20% -5.50% 9.20% -  
  03/19 Philadelphia Fed Business Outlook 05:30 Mar 8.00 -12.70% 36.70 -  
  03/19 Initial Jobless Claims 05:30 14 Mar 220k 281k 211k -  
  03/19 Continuing Claims 05:30 7 Mar 1738k 1701k 1722k 1699k  
  03/19 Bloomberg Consumer Comfort 06:45 15 Mar - 63.00 62.70 -  
  03/19 Leading Index 07:00 Feb 0.10% 0.10% 0.80% 0.70%  
  03/20 Existing Home Sales 07:00 Feb 5.51m - 5.46m -  
  03/20 Existing Home Sales MoM 07:00 Feb 0.90% - -1.30% -
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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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