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Market Commentary

Market Commentary



Today's Coupons
  10-Year Notes   99-06 (+04.5)  
  FN 2.5% Coupon   105-05 (+02)  
  Support   1.942%  
  Resistance   0.505%  
  Monday, August 31, 2020

Treasury Yields Remain Nearly Unchanged as Markets Prepare for the Week Ahead

Market opened today’s session with treasuries slightly higher across all maturities. 10-Year Treasury yield is at 0.7162, 0.49 bp decreased from prior closing of 0.7211.

US stocks fluctuated early morning after the S&P 500 set a record high Friday. Apple Inc. shares rose following a 4 for 1 stock split, meanwhile Microsoft Corp., Walmart Inc., and Oracle Corp. fell after China claimed it could block a possible sale of short-video app TikTok. In other news, the pound weakened after a report stated UK Treasury Officials are pushing for significant tax increases. The dollar was little changed in comparison to its major peers. As investors take some comfort in the global economy's reemergence from viral shutdowns, the pandemic continues to be far from over as India becomes the world's epicenter for new cases all while worldwide cases surpass 25 million. Elsewhere, equities in Japan outperformed peers in Asia, bolstered by Berkshire Hathaway Inc's purchase of stakes in five major trading companies. The Yen gave back some of Friday's gain, the biggest in five months, as Japan searched for a new prime minister. Silver rose, outperforming Gold. West Texas crude oil advanced above $43 a barrel. Reporting in the week ahead, August employment report could deliver the last positive payrolls print before job losses strike again. With back-to school season already disrupted, the holiday season will soon be tested as a robust labor market recovery will be needed in order for net hiring to continue increasing. Fed Chair Jerome Powell's virtual speech last week implemented a policy framework overhaul, which will allow inflation to overshoot 2% target for a period of time following a duration of below-target inflation. Hurricane Laura, which made landfall on August 27 as a category 4 storm, has since been downgraded to a tropical depression, however it may disrupt economic activity at the end of the month. In the week ahead, Manufacturing and Services ISM surveys, along with the Fed's beige book, will provide critical insight into the strength of the labor market recovery ahead of the August payrolls report.

The curve has bull-flattened with UST 10-Year yield down 0.49 bp.
This Week's Events
  08/31 Dallas Fed Manf. Activity 07:30 Aug 0.00 8.00 -3.00 -  
  09/01 ISM Manufacturing 07:00 Aug 54.60 - 54.20 -  
  09/01 ISM Prices Paid 07:00 Aug 54.30 - 53.20 -  
  09/02 Construction Spending MoM 07:00 Jul 1.00% - -0.70% -  
  09/02 MBA Mortgage Applications 04:00 28 Aug - - -6.50% -  
  09/02 ADP Employment Change 05:15 Aug 950k - 167k -  
  09/02 Factory Orders 07:00 Jul 6.00% - 6.20% -  
  09/02 Durable Goods Orders 07:00 Jul F 11.20% - 11.20% -  
  09/02 Durables Ex Transportation 07:00 Jul F 2.40% - 2.40% -  
  09/03 Initial Jobless Claims 05:30 29 Aug 950k - 1006k -  
  09/03 Continuing Claims 05:30 22 Aug 14000k - 14535k -  
  09/03 Trade Balance 05:30 Jul -$58.00b - -$50.70b -  
  09/03 Bloomberg Consumer Comfort 06:45 30 Aug - - 44.30 -  
  09/03 Markit US Services PMI 06:45 Aug F 54.70 - 54.80 -  
  09/03 Markit US Composite PMI 06:45 Aug F - - 54.70 -  
  09/04 Change in Nonfarm Payrolls 05:30 Aug 1390K - 1763K -  
  09/04 Average Hourly Earnings MoM 05:30 Aug 0.00% - 0.20% -  
  09/04 Average Hourly Earnings YoY 05:30 Aug 4.40% - 4.80% -
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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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