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Market Commentary

Market Commentary


Today's Coupons
  10-Year Notes   108-10.5 (+05.5)  
  FN 3.5% Coupon   105-18 (-04.5)  
  Support   2.589%  
  Resistance   0.569%  
  Monday, April 20, 2020

Treasury Yields Fall as WTI Crude Crashes

Market opened today’s session with treasuries advancing across all maturities. 10-Year Treasury yield is at 0.6289, 1.28 bps decreased from prior closing of 0.6417.

US stocks fell as WTI crude crashed about 40% to below $11 a barrel at one point, reaching the weakest level since 1998. The oil market remained massively oversupplied due to the demand shock from the pandemic despite the output deal from a week ago, and the plunge was exaggerated from a fire sale among traders who didn’t have access to storage. Both Treasuries and the dollar gained this morning with mortgages underperforming Treasuries. In corporate news, the pace of earnings season is about to pick up as almost one-fifth of S&P 500 companies are reporting their first quarter results this week. On the pandemic front, Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi said that both sides are close to a deal on more funding for the small business aid program, which could be as large as $500 billion. The Chicago Fed’s National Activity Index indicated another sign of an economic recession due to the pandemic as it plunged to -4.19 in March from a downwardly revised prior of 0.06. The index’s three-month moving average decreased to -1.47, the lowest since 2009. This three-month moving average has historically been below -0.70 as the economy slipped into a recession following a period of an expansion.

The curve has bull-flattened with UST 10-Year yield down 1.28 bps.
This Week's Events
  04/20 Chicago Fed Nat Activity Index 05:30 Mar -3.00 -4.19 0.16 0.06  
  04/21 Existing Home Sales 07:00 Mar 5.25m - 5.77m -  
  04/21 Existing Home Sales MoM 07:00 Mar -9.00% - 6.50% -  
  04/22 MBA Mortgage Applications 04:00 17 Apr - - 7.30% -  
  04/22 FHFA House Price Index MoM 06:00 Feb 0.30% - 0.30% -  
  04/23 Initial Jobless Claims 05:30 18 Apr 4450k - 5245k -  
  04/23 Continuing Claims 05:30 11 Apr 16476k - 11976k -  
  04/23 Bloomberg Consumer Comfort 06:45 19 Apr - - 44.50 -  
  04/23 Markit US Manufacturing PMI 06:45 Apr P 35.00 - 48.50 -  
  04/23 Markit US Services PMI 06:45 Apr P 30.00 - 39.80 -  
  04/23 Markit US Composite PMI 06:45 Apr P - - 40.90 -  
  04/24 Durable Goods Orders 05:30 Mar P -12.00% - 1.20% -  
  04/24 Durables Ex Transportation 05:30 Mar P -6.00% - -0.60% -
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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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