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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   100-15 (-06.5)  
  FN 3.5% Coupon   102-19 (-0.5)  
  Support   3.237%  
  Resistance   1.492%  
Wednesday, August 21, 2019
Treasury Yields Climb as Stocks Advance on Corporate Results
Market opened today’s session with treasuries nudging lower across all maturities. 10-Year Treasury yield is at 1.5774, 2.19 bps increased from prior closing of 1.5555.

President Trump said he’s not ready to make a deal with China while leaving a possibility of an agreement soon. He also said that he’s open to a range of possible actions from a payroll tax cut to a capital gains tax break to divert a recession while reiterating his calls for rate cuts by 100 basis points, somewhat lifting investor sentiment. The surge in Target and Lowe’s shares in premarket after posting second quarter results also help brighten up the mood. Investors’ main focus this week will remain on the annual central bankers retreat in Jackson Hole from Thursday through Saturday and G-7 leaders’ discussion in France over the weekend and Monday. Investors will also be on the lookout for any fresh clues on monetary policy from the minutes of the July Fed meeting which will be published today at 11:00 AM (PT). In Europe, Germany auctioned a 30-Year bond this morning with a 0% coupon for the first time as the country tests the demand for haven assets and it ended up selling at a record low yield of -0.11%. Elsewhere, WTI crude rallied on a reported drop in US crude stockpiles, trading above $56 a barrel this morning.

MBA Mortgage Applications index fell 0.90% after rising 21.70% in prior week. Purchases declined 3.50% and refinances increased 0.40% after rising 1.90% and 36.90% in prior week, respectively. Existing Home Sales in July got a lift from falling mortgage rates, reaching a five month high at 5.42 million vs. 5.40 million consensus following an upwardly revised prior of 5.29 million. 

The curve has bear-flattened with UST 10-Year yield up 2.19 bps.
This Week's Events
  08/19 No Data - - - - - -  
  08/20 No Data - - - - - -  
  08/21 MBA Mortgage Applications 04:00 16 Aug - -0.90% 21.70% -  
  08/21 Existing Home Sales 07:00 Jul 5.40m 5.42m 5.27m 5.29m  
  08/21 Existing Home Sales MoM 07:00 Jul 2.50% 2.50% -1.70% -1.30%  
  08/21 FOMC Meeting Minutes 11:00 31 Jul - - - -  
  08/22 Initial Jobless Claims 05:30 17 Aug 216k - 220k -  
  08/22 Continuing Claims 05:30 10 Aug 1707k - 1726k -  
  08/22 Bloomberg Consumer Comfort 06:45 18 Aug - - 61.20 -  
  08/22 Markit US Services PMI 06:45 Aug P 52.80 - 53.00 -  
  08/22 Markit US Composite PMI 06:45 Aug P - - 52.60 -  
  08/22 Leading Index 07:00 Jul 0.30% - -0.30% -  
  08/22 Kansas City Fed ManfActivity 08:00 Aug 1.00 - -1.00 -  
  08/23 New Home Sales 07:00 Jul 649k - 646k -  
  08/23 New Home Sales MoM 07:00 Jul 0.50% - 7.00% -
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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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