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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   102-26 (+04)  
  FN 3.5% Coupon   102-08 (+04)  
  Support   3.237%  
  Resistance   1.939%  
Wednesday, July 10, 2019
Treasury Yields Slightly Lower after Powell hints a rate cut
Market opened today’s session with treasuries drifting across all maturities. 10-Year Treasury yield is at 2.0613, 0.35 bp decreased from prior closing of 2.0648.

US stock futures rose along with Treasuries after Fed Chair Powell signaled the Fed’s openness to a rate cut as early as this month. He said “crosscurrents have reemerged”, stressing that downside risks to the US economy are lingering as uncertainties mount from ongoing trade wars and weak inflation despite of a recent truce with China. His dovish statement came even after Friday’s strong jobs report which strengthened the case for a rate cut in the near future. The Fed’s chief is also scheduled to testify again before the Senate Banking Committee tomorrow. Meanwhile, US Trade Representative Lighthizer and Treasury Secretary Mnuchin spoke on the phone with their Chinese counterparts yesterday in the first confirmed contact between the two countries after it was agreed to resume trade talks last month at the G-20 summit. In Europe, the European Commission cut its growth and inflation forecast for next year as they saw that a recession in their largest economy was almost inevitable. Elsewhere, WTI crude rallied above $59 a barrel this morning.

MBA Mortgage Applications index fell 2.40% after falling 0.10% in prior week. Purchases increased 2.30% and refinances declined 6.50% after rising 1.10% and falling 1.20% in prior week, respectively. Wholesale Inventories in May came in line with both prior reading and consensus of 0.40%. At 11:00 AM (PT), the minutes from the latest FOMC meeting will be released. Also later today, the US Treasury is scheduled to auction off $24 billion of 10-Year Notes reopening at 10:00 AM (PT).

The curve has bull-steepened with UST 10-Year yield down 0.35 bp.
This Week's Events
  07/08 Consumer Credit 12:00 May $17.000b - $17.497b -  
  07/09 NFIB Small Business Optimism 03:00 Jun 103.10 103.30 105.00 -  
  07/09 JOLTS Job Openings 07:00 May 7470 7323 7449 7372  
  07/10 MBA Mortgage Applications 04:00 5 Jul - -2.40% -0.10% -  
  07/10 Wholesale Trade Sales MoM 07:00 May 0.30% 0.10% -0.40% -  
  07/10 Wholesale Inventories MoM 04:00 May F 0.40% 0.40% 0.40% -  
  07/10 FOMC Meeting Minutes 11:00 19 Jun - - - -  
  07/11 CPI MoM 05:30 Jun 0.00% - 0.10% -  
  07/11 CPI YoY 05:30 Jun 1.60% - 1.80% -  
  07/11 Initial Jobless Claims 05:30 6 Jul 221k - 221k -  
  07/11 Continuing Claims 05:30 29 Jun 1683k - 1686k -  
  07/11 Bloomberg Consumer Comfort 06:45 7 Jul - - 62.60 -  
  07/11 Monthly Budget Statement 11:00 Jun -$7.90b - -$207.80b -  
  07/12 PPI Final Demand MoM 05:30 Jun 0.00% - 0.10% -  
  07/12 PPI Final Demand YoY 05:30 Jun 1.60% - 1.80% -
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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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