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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   1.485%  
  Support   1.668%  
  Resistance   1.505%  
  FN 2.5% Coupon   103.219 (-0.031)  
  Wednesday, June 23, 2021

US Stocks Fluctuate, MBA Mortgage Applications Rise, and US New-Home Sales Drop

The market opened today's session with treasuries lower across all maturities. The 10-Year Treasury yield is currently at 1.4767, 1.35 bps higher than prior closing of 1.4632.
US stocks struggle for a third day as investors continue to assess prospects for economic recovery and continued central bank support as threats of higher inflation increase. The S&P 500 Index rose 0.1% as Fed Chair Jerome Powell emphasized on how policy makers will continue to be patient in waiting to lift borrowing costs. The relationship between Treasuries and US equities has been mended to more traditional grounds after the recent rallies, with one-month correlations between the Bloomberg Barclays US Treasury Index and the S&P 500 Total Return Index falling back below zero. However, fund managers who use fixed-income securities to diversify their portfolios will continue to be annoyed as stocks and bonds move in lockstep. In terms of the housing market, MBA mortgage applications rose 2.10% in the week ending in June 18 after rising 4.2% in the prior week. Purchases went up 0.60% and Refis increased 2.80%. However, sales of new US homes dropped unexpectedly in May as elevated home prices weighed on affordability. Purchases of new single-family homes fell 5.90%, government data has shown on Wednesday. Shipping bottlenecks and higher input prices have held back homebuilding, contributing to skyrocketing prices for the limited supply of homes available. Nonetheless, there appears to be a silver lining, as the report also had data showing new-housing inventory continued to increase. There were 330,000 new homes for sale in May, the most since July 2019. Elsewhere, Bitcoin climbed a day after a dramatic route that briefly wiped out gains for the year, sending it below $30,000. Oil rose as industry data pointing to another drop in US crude stockpiles reinforced a bullish picture for global markets. Coming up this week, the Bank of England interest rate decision comes out on Thursday, along with the Fed releasing the results of stress tests on the largest US banks, GDP, and durable goods. US personal income and spending comes out on Friday.
The curve has bear-flattened with UST 10-Year yield up 1.35 bps.
This Week's Events
  06/21 Chicago Fed Nat Activity Index 05:30 May 0.70 0.29 0.24 -0.09  
  06/22 Richmond Fed Manufact. Index 07:00 Jun 18.00 22.00 18.00 -  
  06/23 MBA Mortgage Applications  04:00 18 Jun - 2.10% -4.20% -  
  06/23 Markit US Manufacturing PMI 06:45 Jun P 61.50 62.60 62.10 -  
  06/23 Markit US Composite PMI 06:45 Jun P - 63.90 68.70 -  
  06/23 Markit US Services PMI 06:45 Jun P 70.00 64.80 70.40 -  
  06/24 Durable Goods Orders 05:30 May P 2.80% - -1.30% -  
  06/24 Initial Jobless Claims 05:30 19 Jun 380k - 412k -  
  06/24 Continuing Claims 05:30 12 Jun 3460k - 3518k -  
  06/24 GDP Price Index 05:30 1Q T 4.30% - 4.30% -  
  06/25 PCE Deflator MoM 05:30 May 0.50% - 0.60% -  
  06/25 PCE Deflator YoY 05:30 May 3.90% - 3.60% -  
  06/25 U. of Mich. Sentiment 07:00 Jun F 86.50 - 86.40 -  
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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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