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Market Commentary

Market Commentary


Today's Coupons
  10-Year Notes   99-22.5 (+04.5)  
  FN 2.5% Coupon   105-06.5 (+05.5)  
  Support   1.942%  
  Resistance   0.505%  
  Wednesday, August 19, 2020

Treasury Yields Fall as Stock Market Pares Record Gains

Market opened today’s session with treasuries edging higher across all maturities. 10-Year Treasury yield is at 0.6541, 1.46 bps decreased from prior closing of 0.6687.

Stocks pared gains this morning following yesterday's record high. Gold slipped below $2,000 an ounce as the dollar steadied. Early movers included Target Corp. on faster-than-expected sales growth, and Momenta Pharmaceuticals Inc., which soared almost 70% after agreeing to a buyout. In other news, sentiment in Asia was dampened following news US President Donald Trump called off last weekend's trade talks. The State Department has taken the additional step of asking US colleges and universities to divest from Chinese holdings in their endowments. July's FOMC minutes are expected to be released later today. In other news, House speaker Nancy Pelosi suggested Democrats might be willing to make more cuts to their stimulus proposal in order to seal a deal with Republicans and expedite coronavirus relief. Elsewhere, crude oil eased following a report gasoline stockpiles are surging. Meanwhile, Bitcoin fell below $12,000 after falling Tuesday to extend its highest close in a year. On the economic front, MBA Mortgage Applications fell by 3.30% in the week ended Aug 14, after rising 6.80% the week prior. Notably, purchases were up 0.80% after rising 2.00% the week prior, and refi's were down 5.30% after rising 9.10% previously. The average 30-year fixed rate stood at 3.13%. Tomorrow August 19, Initial Jobless Claims are expected to continue decreasing to 920,000, in comparison to the previous weekly value of 963,000 claims.

The curve has bull-flattened with UST 10-Year yield down 1.46 bps.
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 - -3.30% 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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