Back to top

Market Commentary

Market Commentary


Today's Coupons
  10-Year Notes   98-30 (-14.5)  
  FN 2.5% Coupon   104-29.5 (-02.5)  
  Support   1.942%  
  Resistance   0.505%  
  Thursday, August 27, 2020

Treasury Yields Rise as Fed Outlines New Inflation Target

Market opened today's session with treasuries edging lower across all maturities. 10-Year Treasury yield is at 0.7096, 2.12 bps increased from prior closing of 0.6884.

Stocks opened higher this morning as the Fed once again reiterated it was in no rush to raise interest rates. Treasury yields fell as the Fed announced it will seek an inflation target average of 2%, implying it will allow periods of overshoot. The Fed also indicated a shift in its maximum employment policy as it aims to allow labor-market gains to run more broadly. The S&P 500 continued higher following a rally which had already pushed it to record close. Abbott Laboratories jumped after winning clearance for a 15-minute COVID test. The dollar weakened versus a basket of its biggest counterparts. Elsewhere, traders continue monitoring news of medical advancements for the coronavirus, from Moderna Inc.'s vaccine trials to the Abbott test that is expected to be priced at $5. Crude oil hovered near a five-month high as Hurricane Kaura crossed over land in the refinery and LNG-rich Gulf of Mexico region. On the economic front, US GDP Annualized QoQ beat expectations after reporting a drop of 31.70%. This is followed by Initial Jobless Claims reporting at 1.006 million against the 1 million expected claims. As applications for state unemployment benefits decreased last week following an unexpected jump, indications point towards the labor market recovery being back on track as COVID infections ease. President Donald Trump's stopgap $300 a week measure in federal support to jobless benefit-recipients continues to slowly make progress, with more than half of the nation's states being approved for the program, however only a few have begun making payments. Tomorrow Personal Income, Wholesale Inventories, Personal Spending, and MNI Chicago PMI to be reported, with expectations set at -0.40%, -0.90%, 1.50%, and 52.60 respectively.

The curve has bear-steepened with UST 10-Year yield up 2.12 bps.
This Week's Events
  08/24 Chicago Fed Nat Activity Index 05:30 Jul 3.70 1.18 4.11 5.33  
  08/25 FHFA House Price Index MoM 06:00 Jun 0.30% 0.90% -0.30% -0.20%  
  08/25 S&P CoreLogic CS 20-City MoM SA 06:00 Jun 0.10% 0.00% 0.04% -0.03%  
  08/25 S&P CoreLogic CS 20-City YoY NSA 06:00 Jun 3.60% 3.46% 3.69% 3.61%  
  08/25 Conf. Board Consumer Confidence 07:00 Aug 93.00 84.80 92.60 91.70  
  08/26 Durable Goods Orders 05:30 Jul P 4.80% 11.20% 7.60% 7.70%  
  08/26 Durables Ex Transportation 05:30 Jul P 2.00% 2.40% 3.60% 4.00%  
  08/27 GDP Annualized QoQ 05:30 2Q S -32.50% -31.70% -32.90% -  
  08/27 Personal Consumption 05:30 2Q S -34.20% -34.10% -34.60% -  
  08/27 GDP Price Index 05:30 2Q S -1.80% -2.00% -1.80% -  
  08/27 Core PCE QoQ 05:30 2Q S -1.10% -1.00% -1.10% -  
  08/27 Initial Jobless Claims 05:30 22 Aug 1000k 1006k 1106k 1104k  
  08/27 Continuing Claims 05:30 15 Aug 14400k 14535k 14844k 14758k  
  08/27 Bloomberg Consumer Comfort 06:45 23 Aug - 44.30 43.50 -  
  08/28 Personal Income 05:30 Jul -0.40% - -1.10% -  
  08/28 Personal Spending 05:30 Jul 1.50% - 5.60% -  
  08/28 PCE Deflator MoM 05:30 Jul 0.40% - 0.40% -  
  08/28 PCE Deflator YoY 05:30 Jul 1.00% - 0.80% -  
  08/28 U. of Mich. Sentiment 07:00 Aug F 72.80 - 72.80 -
Helpful Links
  Visit Us Online   Submit Loan  
  Get Approved   SeeMyLoanStatusTM  
  Download Rate Sheet   Conventional Program Guidelines  
  Price & Lock   Government Program Guidelines  
  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.  
© Sun West Mortgage Company, Inc. All Rights Reserved