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Market Commentary

Market Commentary


Today's Coupons
  10-Year Notes   99-19 (+07.5)  
  FN 2.5% Coupon   105-02.5 (+05)  
  Support   1.942%  
  Resistance   0.505%  
  Tuesday, August 18, 2020

Treasury Yields Fall as Stock Market Approaches New Record

Market opened today’s session with treasuries edging slightly higher across all maturities. 10-Year Treasury yield is at 0.6801, 0.81 bp decreased from prior closing of 0.6882.

Stocks opened near record highs as US home construction data added optimism to the economy, offsetting renewed tensions with China. Equities gains were driven by a jump in Housing Starts, all the while Home Depot Inc.'s sales growth more than doubled analysts projections. Better-than-feared economic data have helped poise S&P 500 to the quickest rebound on record, meanwhile stimulus talks have stalled and tensions between the world's two largest economies continued to rise. In the US, the commerce department announced further restrictions on Huawei Technologies Co. aimed at cutting its access to commercially available chips. In other news, minutes for the latest FOMC minutes will be due tomorrow, August 19. On the economic front, Housing Starts beat expectations after rising to 1.496 million for the month of July. This is followed by Building Permits beating expectations as well after reporting at 1.495 million. Together these reports highlight a surge in building applications as a robust demand for housing is fueled by record low interest rates. In more granular detail, Housing Starts jumped by 22.60%, the most since 2016, and applications to build increased by 18.80%, the most since January 1990. Reporting tomorrow are MBA Mortgage Applications, which rose last week by 6.80%.

The curve has bull-flattened with UST 10-Year yield down 0.81 bp.
This Week's Events
  08/17 Empire Manufacturing 05:30 Aug 15.00 3.70 17.20 -  
  08/17 Net Long-term TIC Flows 13:00 Jun $113.00B $127.00B $118.10B -  
  08/17 Total Net TIC Flows 13:00 Jun -$67.90B -$4.50B -$15.90B -  
  08/18 Housing Starts 05:30 Jul 1245k 1496k 1186k 1220k  
  08/18 Housing Starts MoM 05:30 Jul 5.00% 22.60% 17.30% 17.50%  
  08/18 Building Permits 05:30 Jul 1326k 1495k 1241k 1258k  
  08/18 Building Permits MoM 05:30 Jul 5.40% 18.80% 2.10% 3.50%  
  08/19 MBA Mortgage Applications 04:00 14 Aug - - 6.80% -  
  08/20 Philadelphia Fed Business Outlook 05:30 Aug 21.00 - 24.10 -  
  08/20 Initial Jobless Claims 05:30 15 Aug 920k - 963k -  
  08/20 Continuing Claims 05:30 8 Aug 15000k - 15486k -  
  08/20 Bloomberg Consumer Comfort 06:45 16 Aug - - 43.70 -  
  08/20 Leading Index 07:00 Jul 1.10% - 2.00% -  
  08/21 Markit US Services PMI 06:45 Aug P 51.00 - 50.00 -  
  08/21 Markit US Composite PMI 06:45 Aug P - - 50.30 -  
  08/21 Existing Home Sales 07:00 Jul 5.40m - 4.72m -  
  08/21 Existing Home Sales MoM 07:00 Jul 14.40% - 20.70% -
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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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