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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-08 (+09)  
  FN 2.5% Coupon   103-24 (+02)  
  Support   2.138%  
  Resistance   0.635%  
  Thursday, June 18, 2020

Treasury Yields Fall on Disappointing Employment Data

Market opened today’s session with treasuries rallying across all maturities. 10-Year Treasury yield is at 0.6969, 4.11 bps decreased from prior closing of 0.7380.

US stocks fell for a second day as investors weighed the latest disappointing unemployment data and reports about rising number of coronavirus cases. Arizona reported a record-high number of new confirmed cases, while Texas saw an 11% daily spike in hospitalizations for patients with Covid-19 on Wednesday. Initial Jobless Claims, on the other hand, slightly trended down to 1508k from an upwardly revised prior reading of 1566k. However, the reading still came in 218k above consensus of 1290k, indicating that the economy will not operate at full capacity for some time. Continuing Claims also came in above consensus of 19.85 million at 20.544 million. On the contrary, the rest of the calendar painted a somewhat positive economic outlook. Philadelphia Fed Business Outlook in June surged to 27.50 from -43.10 prior vs. -21.40 consensus, and both Bloomberg Economic Expectations and Consumer Comfort rose to 38.00 and 40.20 from 29.00 and 38.70 prior, respectively. Lastly, Leading Index in May also rose to 2.80% from a downwardly revised prior of -6.10% vs. 2.40% consensus. Treasuries advanced and WTI crude edged higher, trading above $38 a barrel this morning.

The curve has bull-flattened with UST 10-Year yield down 4.11 bps.
This Week's Events
  06/15 Empire Manufacturing 05:30 Jun -29.60 -0.20 -48.50 -  
  06/15 Net Long-term TIC Flows 13:00 Apr - -$128.40B -$112.60B -$111.60B  
  06/15 Total Net TIC Flows 13:00 Apr - $125.30B $349.90B $355.30B  
  06/16 Retail Sales Advance MoM 05:30 May 8.40% 17.70% -16.40% -14.70%  
  06/16 Capacity Utilization 06:15 May 66.90% 64.80% 64.90% 64.00%  
  06/17 MBA Mortgage Applications 04:00 12 Jun - 8.00% 9.30% -  
  06/17 Housing Starts 05:30 May 1100k 974k 891k 934k  
  06/17 Housing Starts MoM 05:30 May 23.50% 4.30% -30.20% -26.40%  
  06/17 Building Permits 05:30 May 1245k 1220k 1074k 1066k  
  06/17 Building Permits MoM 05:30 May -16.80% 14.40% -20.80% -21.40%  
  06/18 Philadelphia Fed Business Outlook 05:30 Jun -21.40 27.50 -43.10 -  
  06/18 Initial Jobless Claims 05:30 13 Jun 1290k 1508k 1542k 1566k  
  06/18 Continuing Claims 05:30 6 Jun 19850k 20544k 20929k 20606k  
  06/18 Bloomberg Consumer Comfort 06:45 14 Jun - 40.20 38.70 -  
  06/18 Leading Index 07:00 May 2.40% 2.80% -4.40% -6.10%
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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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