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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   107-10.5 (-19)  
  FN 3.5% Coupon   105-12 (-00.5)  
  Support   2.483%  
  Resistance   0.547%  
  Wednesday, May 6, 2020

Treasury Yields Rise on Prospect of Economy Reopening

Market opened today’s session with treasuries selling-off across all maturities. 10-Year Treasury yield is at 0.7349, 7.30 bps increased from prior closing of 0.6619.

US stocks slightly edged lower despite the continued strength in the tech sector. Facebook, Netflix, Amazon, and Alphabet traded higher this morning and some of the retailers and cruise lines rose as well on the growing number of states reopening their economies in the early part of May. California will permit clothing stores, bookstores and flower shops to reopen for curbside pickup this Friday while New York plans to ease restrictions on manufacturers, construction, and select retailers next week. With President Trump also pushing for the US economy to reopen as soon as possible, experts say the public health consequences from reopening the economy will take a few weeks to be confirmed. In the economic calendar, private payrolls plummeted by 20.236 million in April, marking the worst loss in the survey’s history going back to 2002. The data in prior month was revised down to -149k from -27k. With today’s number being a harbinger for Friday’s payroll data, many, including St. Louis Fed President Bullard, expect the jobs report on Friday will likely be one of the worst in American history. MBA mortgage applications index rose 0.10% after falling 3.30% in prior week. Purchases continued to increase 5.80% after rising 11.60% in prior and refinances declined 1.70% after falling 7.30% in prior. Elsewhere, WTI crude slightly edged lower from prior closing as oversupply fears started to resurface, trading below $24 a barrel this morning.

The curve has bear-steepened with UST 10-Year yield up 7.30 bps.
This Week's Events
  05/04 Durable Goods Orders 07:00 Mar F -14.40% -14.70% -14.40% -  
  05/04 Durables Ex Transportation 07:00 Mar F -0.20% -0.40% -0.20% -  
  05/05 Markit US Services PMI 06:45 Apr F 27.00 26.70 27.00 -  
  05/05 Markit US Composite PMI 06:45 Apr F - 27.00 27.40 -  
  05/06 MBA Mortgage Applications 04:00 1 May - 0.10% -3.30% -  
  05/06 ADP Employment Change 05:15 Apr -20550k -20236k -27k -149k  
  05/07 Initial Jobless Claims 05:30 2 May 3000k - 3839k -  
  05/07 Continuing Claims 05:30 25 Apr 19800k - 17992k -  
  05/07 Bloomberg Consumer Comfort 06:45 3 May - - 39.50 -  
  05/08 Change in Nonfarm Payrolls 05:30 Apr -21250k - -701k -  
  05/08 Average Hourly Earnings MoM 05:30 Apr 0.40% - 0.40% -  
  05/08 Average Hourly Earnings YoY 05:30 Apr 3.30% - 3.10% -  
  05/08 Wholesale Inventories MoM 07:00 Mar F -1.00% - -1.00% -
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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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