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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   100-03.5 (+01.5)  
  FN 2.5% Coupon   104-17 (+04)  
  Support   2.103%  
  Resistance   0.571%  
  Tuesday, July 14, 2020

Treasury Yields Lower as Earnings Kick Off

Market opened today’s session with treasuries edging higher across all maturities. 10-year Treasury yield is at 0.6053, 1.31 bps decreased from prior closing of 0.6184.

US stocks slumped again as tech shares struggled while investors grappled with earnings results from major banks. JPMorgan Chase reported its second quarter profit that beat analysts’ expectations on record trading revenue bolstered by surging volatility while Wells Fargo fell after posting a loss. Treasuries and the dollar remained steady. Equities in Asia broadly sold-off after the Trump administration rejected China’s expansive claims in the South China Sea which is a reversal of a previous policy of not taking sides in maritime disputes in the region. China also announced it was imposing sanctions on Lockheed Martin after the US approved a deal for the supply of missile parts to Taiwan.

Spread of the pandemic had shown no signs of slowing down which forced officials around the globe to put stricter measures to control the spread. California Governor Newsom ordered yesterday to close all indoor entertainment including dining and bars, and Vice President Pence told US governors that the administration would back them on any measures that they take to control the pandemic. Outside the US, Japan said a new state of emergency is possible and Hong Kong implemented its toughest social distancing measures yet. In the economic calendar, NFIB Small Business Optimism in June rose to 100.60 from 94.40 prior vs. 97.80 consensus. The headline CPI in June also increased to 0.60% from -0.10% prior along with the core inching higher to 0.20% from -0.10% prior.

The curve has bull-flattened with UST 10-Year yield down 1.31 bps.

This Week's Events
  07/13 Monthly Budget Statement 11:00 Jun -$863.0b -$864.1b -$8.5b -  
  07/14 NFIB Small Business Optimism 03:00 Jun 97.80 100.60 94.40 -  
  07/14 CPI MoM 05:30 Jun 0.50% 0.60% -0.10% -  
  07/14 CPI YoY 05:30 Jun 0.60% 0.60% 0.10% -  
  07/14 CPI Index NSA 05:30 Jun 257.706 257.797 256.394 -  
  07/14 CPI Core Index SA 05:30 Jun 265.884 266.065 265.441 -  
  07/15 MBA Mortgage Applications 05:30 10 Jul - - 2.20% -  
  07/15 Import Price Index MoM 05:30 Jun 1.00% - 1.00% -  
  07/15 Import Price Index YoY 05:30 Jun -3.70% - -6.00% -  
  07/15 Export Price Index MoM 05:30 Jun 0.80% - 0.50% -  
  07/15 Export Price Index YoY 05:30 Jun - - -6.00% -  
  07/16 Initial Jobless Claims 05:30 11 Jul 1250k - 1314k -  
  07/16 Continuing Claims 05:30 4 Jul 17600k - 18062k -  
  07/16 Bloomberg Consumer Comfort 06:45 12 Jul - - 42.90 -  
  07/17 U. of Mich. Sentiment 07:00 Jul P 79.00 - 78.10 -
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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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