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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   98-11 (-03.5)  
  FN 3.5% Coupon   98-05.5 (-02.5)  
  Support   3.111%  
  Resistance   2.810%  
Wednesday, September 19, 2018
Treasuries are slightly lower across the curve this morning from yesterday's close. The UST 10-Year yield is currently at 3.071% after closing at 3.056% prior.

Treasuries lowered overnight as markets continued to focus on the latest development of the trade war between U.S. and China. Despite growing concerns on global growth, stock markets have shown an improving sentiment toward the ongoing trade war, but that perspective could change if tariffs impact the economy bigger than expected. Investors have turned their attention this morning onto the latest Nafta talks between U.S. and Canada as trade discussions are set to resume in Washington today. U.S. stocks rose, while the dollar dipped with treasuries on the news. Elsewhere, Brexit talks between the U.K. and the European Union hit another snag as the two continue to battle against the clock for an accord.

On the economic calendar, we received the MBA Mortgage Applications for the week ended September 14 which rose 1.60% in activities after dropping 1.80% the week prior. Purchase applications rose 0.30% following a 0.90% increase the week prior, while refinancing activities rose 3.70% after falling 5.90% the week prior. We also received the 2Q Current Account Balance which reported the current account gap narrowed to $101.50 Billion from a downwardly revised $121.70 Billion deficit prior. Moreover, we received the August Housing Starts which rose 9.20% MoM to 1282k unit rate following a revised 0.30% drop to 1174k unit rate prior. Meanwhile, Building Permits fell 5.70% in August to 1229k unit rate following a revised 0.90% increase to 1303k unit rate prior.

The curve has bear-steepened with the UST 10-Year yield up 1.5 bps from prior closing.
This Week's Events
  09/17 Empire Manufacturing 05:30 Sep 23.00 19.00 25.60 -  
  09/18 NAHB Housing Market Index 07:00 Sep 66.00 67.00 67.00 -  
  09/18 Total Net TIC Flows 13:00 Jul $46.00b $52.20b $114.50b $189.70b  
  09/18 Net Long-term TIC Flows 13:00 Jul - $74.80b -$36.50b -  
  09/19 MBA Mortgage Applications 04:00 14 Sep - 1.60% -1.80% -  
  09/19 Housing Starts 05:30 Aug 1238k 1282k 1168k 1174k  
  09/19 Housing Starts MoM 05:30 Aug 5.70% 9.20% 0.90% -0.30%  
  09/19 Building Permits 05:30 Aug 1310k 1229k 1311k 1303k  
  09/19 Building Permits MoM 05:30 Aug 0.50% -5.70% 1.50% 0.90%  
  09/20 Philadelphia Fed Business Outlook 05:30 Sep 18.00 - 11.90 -  
  09/20 Initial Jobless Claims 05:30 15 Sep 210k - 204k -  
  09/20 Continuing Claims 05:30 8 Sep 1705k - 1696k -  
  09/20 Bloomberg Consumer Comfort 06:45 16 Sep - - 59.00 -  
  09/20 Leading Index 07:00 Aug 0.50% - 0.60% -  
  09/20 Existing Home Sales 07:00 Aug 5.36m - 5.34m -  
  09/20 Existing Home Sales  MoM 07:00 Aug 0.40% - -0.70% -  
  09/21 Markit US Manufacturing PMI 06:45 Sep P 55.00 - 54.70 -  
  09/21 Markit US Services PMI 06:45 Sep P 55.00 - 54.80 -  
  09/21 Markit US Composite PMI 06:45 Sep P - - 54.70 -  
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  This information is provided solely for informational use and is not intended as trading or investment advice 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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