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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-09 (-17)  
  FN 3.5% Coupon   105-09 (-01.5)  
  Support   2.426%  
  Resistance   0.547%  
  Monday, May 18, 2020

Treasury Yields Climb as Stocks Rally on Vaccine Hopes

Market opened today’s session with treasuries slightly selling-off across all maturities. 10-Year Treasury yield is at 0.6866, 4.38 bps increased from prior closing of 0.6428.

Stocks rebounded from losses last week, marking the biggest jump in a month, after Moderna Inc reported positive phase one results for a potential coronavirus vaccine. The company reported all 45 participants had developed antibodies after two doses, boosting optimism to start the week. Disney, MGM Resorts, Carnival, and major airlines shares jumped as they would benefit from the economy reopening. In addition, comments from the Fed Chair Powell that the Fed has more ammunition to combat the economic downturn and that he is highly confident the US economy will claw its way back added to the investor bullish sentiment. On the other hand, he also said that the recovery could stretch to the end of 2021. Treasuries sold-off and oil advanced with WTI crude trading above $32 a barrel as the easing of quarantine helped boost demand. In the economic calendar, US homebuilder sentiment rose in May by more than consensus of 35 to 37 following a record slump in April. The index plummeted 42 points last month which marked the most in records to 1985 but the current low mortgage interest rates have helped stabilizing the sales and demand.

The curve has bear-steepened with UST 10-Year yield up 4.38 bps.
This Week's Events
  05/18 NAHB Housing Market Index 07:00 May 35 37 30 -  
  05/19 Housing Starts 05:30 Apr 904k - 1216k -  
  05/19 Housing Starts MoM 05:30 Apr -25.70% - -22.30% -  
  05/19 Building Permits 05:30 Apr 1000k - 1353k 1350k  
  05/19 Building Permits MoM 05:30 Apr -25.90% - -6.80% -7.00%  
  05/20 MBA Mortgage Applications 04:00 15 May - - 0.30% -  
  05/21 Philadelphia Fed Business Outlook 05:30 May -40.00 - -56.60 -  
  05/21 Initial Jobless Claims 05:30 16 May 2400k - 2981k -  
  05/21 Continuing Claims 05:30 9 May 23500k - 22833k -  
  05/21 Bloomberg Consumer Comfort 06:45 17 May - - 35.80 -  
  05/21 Markit US Services PMI 06:45 May P 32.00 - 26.70 -  
  05/21 Markit US Composite PMI 06:45 May P - - 27.00 -  
  05/21 Existing Home Sales 07:00 Apr 4.25m - 5.27m -  
  05/21 Existing Home Sales MoM 07:00 Apr -19.40% - -8.50% -  
  05/21 Leading Index 07:00 Apr -5.50% - -6.70% -
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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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