Back to top

Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   95-11 (-04)  
  FN 2.5% Coupon   102-29.5 (+02)  
  Support   1.312%  
  Resistance   0.902%  
  Wednesday, March 24, 2021

Treasury Yields Rise along with Tech & Oil

Market opened today's session with treasuries lower across all maturities. 10-Year Treasury yield is at 1.6419, 2.13 bps increased from prior closing of 1.6206.
US stocks opened higher this morning, with tech leading the way as Federal Reserve Chairman Jerome Powell reassured inflation risks were under control. Oil noted an increase after a container ship blocked traffic in the Suez Canal, one of the world’s busiest maritime trade routes. West Texas Intermediate crude increased by more than 3% following the incident. Traffic is expected to resume today or tomorrow, with efforts underway to move the vessel. Following last month’s disastrous seven year auction, which sparked a global sell-off in bonds, the Treasury auctions on Wednesday and Thursday are expected to be carefully monitored, with today’s offering including $61 billion in five-year notes. In Europe, stocks edged lower, with notable laggards seen in automakers and banks. Elsewhere, Hong Kong’s decision to temporarily suspend BioNTech SE vaccines coincided with a 10% drop in equities, towards correction territory. In terms of currencies, Bitcoin rose after Tesla’s CEO, Elon Musk, tweeted that the firm’s cars can be purchased with the cryptocurrency. In terms of taxes, Democrats moved to overhaul the US tax code in the coming months, with a potential raise on individual income tax rates and stronger audits on the wealthiest Americans. President Joe Biden is looking into what would become the biggest tax increase since 1993 in order to pay for infrastructure, clean energy, and the $1.9 trillion pandemic-relief package. With such specific tax plans still up in the air, some Wall Street banks have yet to set their expectations. Reporting today, the MBA mortgage applications index fell 2.50% for the week ending March 19, after falling another 2.20% in the week prior. Purchases have gone up 2.60% after rising 1.80% on the previous week, with FHA purchases failing to note significant changes since last week’s 1.10% rise. However, refis are at 60.90% of loans in comparison to prior week’s 62.90%, with VA refis in particular falling by 11.70%. The Avg 30-yr fixed rate stood at 3.36%. In the durable goods market, Durable Goods Orders fell for the first time since April 2020. This is due to the recent volatile weather conditions and stretched supply chains such as, industrial production, vehicle sales, and housing figures. However, as more sectors of the economy are set to reopen in the coming months, strong gains and solid prospects are expected. The durable goods report also shows signs that the main problem with most factories involves keeping up with elevated demand.  Some key events to watch closely this week include US Treasury auctions of five and seven year debt, EIA crude oil inventory report on Wednesday, and US personal income and spending data on Friday.
The curve has bear-steepened with UST 10-Year yield up 2.13 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 - -2.50% -2.20% -  
  03/24 Durable Goods Orders 05:30 Feb P 0.60% -1.10% 3.40% 3.50%  
  03/24 Markit US Manufacturing PMI 06:45 Mar P 59.50 59.00 58.60 -  
  03/24 Markit US Composite PMI 06:45 Mar P - 59.10 59.50 -  
  03/24 Markit US Services PMI 06:45 Mar P 60.10 60.00 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 -  
Helpful Links
  Visit Us Online   Submit Loan  
  Get Approved   SeeMyLoanStatusTM  
  Download Rate Sheet   Conventional Program Guidelines  
  Price & Lock   Government Program Guidelines  
  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.  
© Sun West Mortgage Company, Inc. All Rights Reserved