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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   108-01 (-03.5)  
  FN 3.5% Coupon   105-19.5 (+02.5)  
  Support   2.483%  
  Resistance   0.547%  
  Friday, May 8, 2020

Treasury Yields Drift amid Unprecedented Job Losses

Market opened today’s session with long term treasuries edging lower. 10-Year Treasury yield is at 0.6354, 0.55 bp decreased from prior closing of 0.6409.

US employers cut an unprecedented 20.5 million jobs in April and the unemployment rate skyrocketed to 14.70%. Both numbers easily topped the post-World War II era and the underemployment rate which includes those not looking for work as well as those holding part-time jobs also hit an all-time high of 22.80%. Despite the dismal economic data, stocks managed to rise this morning as investors looked past these numbers and focused more on the economy reopening. Also, it was reported that the phone call between China’s Vice Premier Liu He, US Trade Representative Lighthizer and Treasury Secretary Mnuchin had a constructive discussion and that commitments made will be met in a timely manner which helped boosting investor sentiment as well. Meanwhile, oil headed for its first consecutive weekly gain since February as production cuts from the major producers and a recent recovery in demand helped rebalancing the market. Treasury curves steepened and the dollar weakened with mortgages slightly outperforming Treasuries. The last item on today’s economic calendar was the wholesale inventories which slightly rose to -0.80% from -1.00% prior vs. -1.00% consensus.

The curve has bull-steepened with UST 10-Year yield down 0.55 bp.
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 3169k 3839k 3846k  
  05/07 Continuing Claims 05:30 25 Apr 19800k 22647k 17992k 18011k  
  05/07 Bloomberg Consumer Comfort 06:45 3 May - 36.90 39.50 -  
  05/08 Change in Nonfarm Payrolls 05:30 Apr -22000k -20500k -701k -870k  
  05/08 Average Hourly Earnings MoM 05:30 Apr 0.40% 4.70% 0.40% 0.50%  
  05/08 Average Hourly Earnings YoY 05:30 Apr 3.30% 7.90% 3.10% 3.30%  
  05/08 Wholesale Inventories MoM 07:00 Mar F -1.00% -0.80% -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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