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Market Commentary

Market Commentary


Today's Coupons
  10-Year Notes   95-09 (+14.5)  
  FN 2.5% Coupon   102-23.5 (+06)  
  Support   1.312%  
  Resistance   0.9024%  
  Tuesday, March 23, 2021

Treasury Yields Fall along with US Stocks and Oil Prices

Market opened today's session with treasuries higher across all maturities. 10-Year Treasury yield is at 1.6541, 4.05 bps decreased from prior closing of 1.6946.
US stocks slumped early morning as oil plummeted, and bonds advanced. The S&P 500 Index slipped as worldwide COVID deaths and cases were on the rise. European stocks also fell as Chancellor Angela Merkel placed a hard lockdown in Germany, creating concern over the delay in global economic recovery. Notably, US Treasuries fell for a second day this week as the dollar strengthened. As investors take caution in a delayed coronavirus recovery, bond stability continues to provide some relief against inflation concerns in the US. Furthermore, investors celebrate gains as the S&P 500 noted a 75% increase from its bear-market bottom a year ago. Later on this week, the EIA crude oil inventory report will be released on Wednesday and US personal income and spending data will report on Friday. Index-wise, the S&P 500 dipped another 0.2% as of 6:30 AM (PT). Additionally, the Stoxx Europe 600 Index decreased by 0.1%, MSCI Asia Pacific Index decreased 0.8%, and the MSCI Emerging Market Index fell 0.9%. In terms of currencies, the Bloomberg Dollar Spot Index gained 0.4%, while the euro fell 0.4% to 1.1881 and the British pound fell 0.6% to $1.3786. In regards to the housing market, US Sales of new homes declined in February as elevated prices and limited foot traffic were a result of severe winter in various areas of the country. Single-family home purchases decreased 18.2%, the strongest decline seen since July 2013. Additionally, sales in the Midwest decreased by 37.5%, the biggest drop in 27 years, all the while sales in the South fell 14.7%, the most in six years. Single family home sales in the West declined by 16.4%.  Nevertheless, the housing market’s strength through the pandemic can be seen as the pace of new home sales remains at 8.2%, on a seasonally adjusted basis. At the current sales pace, it would take 4.8 months to exhaust the supply of new homes, compared with 3.8 months in January. Reporting tomorrow are US MBA Mortgage Applications for the week ending March 19, and US manufacturing PMI for the month of March.
The curve has bull-flattened with UST 10-Year yield down 4.05 bps.
This Week's Events
  03/22 Chicago Fed Nat Activity Index 05:30 Feb 0.72 -1.09 0.66 0.75  
  03/23 Richmond Fed Manufact. Index 07:00 Mar 16.00 17.00 14.00 -  
  03/24 MBA Mortgage Applications  04:00 19 Mar - - -2.20% -  
  03/24 Durable Goods Orders 05:30 Feb P 0.60% - 3.40% -  
  03/24 Markit US Manufacturing PMI 06:45 Mar P 59.50 - 58.60 -  
  03/24 Markit US Composite PMI 06:45 Mar P - - 59.50 -  
  03/24 Markit US Services PMI 06:45 Mar P 60.10 - 59.80 -  
  03/25 Initial Jobless Claims 05:30 20 Mar 730k - 770k -  
  03/25 Continuing Claims 05:30 13 Mar 4000k - 4124k -  
  03/25 GDP Price Index 05:30 4Q T 2.10% - 2.10% -  
  03/26 PCE Deflator MoM 05:30 Feb 0.30% - 0.30% -  
  03/26 PCE Deflator YoY 05:30 Feb 1.60% - 1.50% -  
  03/26 U. of Mich. Sentiment 07:00 Mar F 83.60 - 83.00 -  
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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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