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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-24.5 (+07.5)  
  FN 3.5% Coupon   101-05.5 (+03)  
  Support   3.237%  
  Resistance   2.356%  
Wednesday, May 22, 2019
Treasury Yields Lower as Trade Tensions Grow
Market opened today’s session with treasuries slightly advancing across all maturities. 10-Year treasury yield is at 2.3997, 2.67 bps decreased from prior closing of 2.4264.

US equity futures fell this morning as tech sector dragged down investor sentiment. Qualcomm led the decline in the sector in premarket after an unfavorable antitrust ruling. Another confrontation over technology from the White House added to risk off sentiment this morning; the White House is reportedly considering blacklisting 5 Chinese video-surveillance companies which will be barred from using US components or software. After the latest round of trade negotiation hit another impasse, the Trump administration proceeded to target Chinese tech companies and this latest development added more fear to a potential tech cold war. Elsewhere, WTI crude declined below $63 a barrel while the dollar and Treasuries held steady before the latest FOMC meeting minutes.

MBA Mortgage Applications Index rose 2.40% after falling 0.60% in prior week. Purchases fell 2.00% and refinances increased 8.30% after falling 0.60% and 0.50% in prior week, respectively. Later today, the minutes from the latest FOMC meeting will be released at 11:00 AM (PT). St. Louis Fed President Bullard said in an interview with Bloomberg that the Fed may have “slightly overdone it” by raising interest rates in December although it is premature to talk about a rate cut. Investors will seek any hints on potential monetary loosening in the minutes.

The curve has bull-steepened with UST 10-Year yield down 2.67 bps.
This Week's Events
  05/20 Chicago Fed Nat Activity Index 05:30 Apr -0.20 -0.45 -0.15 0.05  
  05/21 Existing Home Sales 07:00 Apr 5.35m 5.19m 5.21m -  
  05/21 Existing Home Sales MoM 07:00 Apr 2.70% -0.40% -4.90% -  
  05/22 MBA Mortgage Applications 04:00 17 May - 2.40% -0.60% -  
  05/22 FOMC Meeting Minutes 11:00 1 May - - - -  
  05/23 Initial Jobless Claims 05:30 18 May 215k - 212k -  
  05/23 Continuing Claims 05:30 11 May 1666k - 1660k -  
  05/23 Bloomberg Consumer Comfort 06:45 19 May - - 59.90 -  
  05/23 Markit US Manufacturing PMI 06:45 May P 52.70 - 52.60 -  
  05/23 Markit US Services PMI 06:45 May P 53.50 - 53.00 -  
  05/23 Markit US Composite PMI 06:45 May P - - 53.00 -  
  05/23 New Home Sales 07:00 Apr 675k - 692k -  
  05/23 New Home Sales MoM 07:00 Apr -2.50% - 4.50% -  
  05/23 Kansas City Fed ManfActivity 08:00 May 6.00 - 5.00 -  
  05/24 Durable Goods Orders 05:30 Apr P -2.00% - 2.60% -  
  05/24 Durables Ex Transportation 05:30 Apr P 0.10% - 0.30% -
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  This information is provided solely for informational use and is not intended as trading or investment advice 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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