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Market Commentary

Market Commentary


Today's Coupons
  10-Year Notes   100-12 (+06)  
  FN 2.5% Coupon   104-18.5 (+01)  
  Support   2.081%  
  Resistance   0.571%  
  Wednesday, July 22, 2020

Treasury Yields Slightly Lower on Renewed US-China Tensions

Market opened today’s session with treasuries slightly edging higher across all maturities. 10-Year Treasury yield is at 0.5807, 1.97 bps decreased from prior closing of 0.6004.

Stocks fluctuated this morning after three straight days of gains amid renewed US-China tensions. The US State Department abruptly ordered China’s Houston consulate to close in three days. It is not yet clear what exactly brought this move but the State Department said the closure was to “protect American intellectual property” and America’s “private information”. China’s Foreign ministry spokesperson Wang Wenbin condemned the action and warned of firm countermeasures if the U.S. does not reverse its decision. However, a positive news regarding vaccine to combat the coronavirus somewhat offset the bearish mood. The US agreed to pay Pfizer and BioNTech $1.95 billion to produce 100 million coronavirus vaccine if it proves to be safe and effective. The government can order additional $500 million doses under this agreement. Earnings season will continue today as well with Microsoft and Tesla scheduled to post their results after the bell. Treasuries rose and silver reached near a 7-year high. In the US economic calendar, MBA mortgage applications index rose 4.10% after rising 5.10% in prior week. Both purchases and refinances increased 1.80% and 5.30% after falling 6.10% and rising 11.90% in prior week, respectively. FHFA House Price Index in May fell to -0.30% from 0.10% revised prior and Existing Home Sales in June rose to 4.72 million from 3.91 million prior.

The curve has bull-flattened with UST 10-Year yield down 1.97 bps.
This Week's Events
  07/20 No Data - - - - - -  
  07/21 Chicago Fed Nat Activity Index 05:30 Jun 4.00 4.11 2.61 3.50  
  07/22 MBA Mortgage Applications 04:00 17 Jul - 4.10% 5.10% -  
  07/22 FHFA House Price Index MoM 06:00 May 0.30% -0.30% 0.20% 0.10%  
  07/22 Existing Home Sales 07:00 Jun 4.75m 4.72m 3.91m -  
  07/22 Existing Home Sales MoM 07:00 Jun 21.40% 20.70% -9.70% -  
  07/23 Initial Jobless Claims 05:30 18 Jul 1300k - 1300k -  
  07/23 Continuing Claims 05:30 11 Jul 17100k - 17338k -  
  07/23 Bloomberg Consumer Comfort 06:45 19 Jul - - 44.30 -  
  07/23 Leading Index 07:00 Jun 2.10% - 2.80% -  
  07/24 Markit US Services PMI 06:45 Jul P 51.00 - 47.90 -  
  07/24 Markit US Composite PMI 06:45 Jul P - - 47.90 -
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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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