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Market Commentary

Market Commentary


Today's Coupons
  10-Year Notes   108-31.5 (+18.5)  
  FN 3.5% Coupon   105-13.5 (-01)  
  Support   2.589%  
  Resistance   0.547%  
  Tuesday, April 21, 2020

Treasury Yields Fall Further as WTI Crude Continues to Plunge

Market opened today’s session with treasuries rallying across all maturities. 10-Year Treasury yield is at 0.5581, 4.72 bps decreased from prior closing of 0.6053.

US stocks tumbled for a second day as a fresh bout of risk aversion took over the financial markets with oil continuing with its historic plunge. The June contract plunged as much as 42% after the May contracts fell below zero for the first time in history, meaning producers would pay someone to take the oil off their hands. This oil rout may be signaling that the economic fallout from the pandemic will be far worse than initially anticipated. Treasuries rallied and mortgages underperformed Treasuries this morning. On the other hand, corporate earnings posted so far have been adding to the concerns as well. Netflix, Texas Instruments, and Chipotle are among the companies scheduled to report their first quarter results after the bell today. Meanwhile, President Trump said late Monday that he would sign an executive order to temporarily suspend immigration into the US to protect jobs of Americans. Also, it was reported that North Korea’s dictator Kim Jung Un was in critical condition which added more to the uncertainty.

The economic fallout from the coronavirus pandemic continued to surface as today’s Existing Home Sales in March tumbled to 5.27 million from a downwardly revised prior of 5.76 million, marking the sharpest decline since November 2015. Today’s reading represents weaker demand in housing market and indicates that it may get even worse in the coming months.

The curve has bull-flattened with UST 10-Year yield down 4.72 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 5.27m 5.77m 5.76m  
  04/21 Existing Home Sales MoM 07:00 Mar -9.00% -8.50% 6.50% 6.30%  
  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 4500k - 5245k -  
  04/23 Continuing Claims 05:30 11 Apr 17000k - 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 -6.50% - -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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