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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   98-18.5 (+1)  
  FN 2.5% Coupon   104-25.5 (+4.5)  
  Support   0.896%  
  Resistance   0.507%  
  Tuesday, October 6, 2020

Treasury Yields Lower As Trade Deficit Widens


Market opened today's session with treasuries slightly higher across all maturities. 10-Year Treasury yield is at 0.7801, 0.16 bps decrease from prior closing of 0.7817.

US markets opened mixed this morning in anticipation of a speech by Federal Reserve Chairman Jerome Powell on the state of the economy. Notable losers include Logitech International SA, which fell following news Apple Inc. planned on launching its own audio products. Elsewhere, investors will be following keynote addresses by Powell and Central Bank Chief Economist Philip Lane at the National Association for Business Economics hosted today. The Fed has stressed US recovery is contingent on containing COVID cases in addition to increasing federal stimulus to support jobs affected by the pandemic. The pandemic itself has seen a recent uptick with coronavirus cases jumping the most in Germany since April, and Italy setting tighter restrictions to limit the spread of the virus. In other news, the pound fluctuated as the European Union signaled it will not be offering concessions to Boris Johnson prior to next week's Brexit deadline. WTI crude rose 3.30% to $40.53 a barrel while Gold strengthened by 0.1%. On the economic front, Trade Balance worsened by $4 billion in the month of August as it reported at -$67.1 billion today. With imports increasing by 3.20% ahead of the holiday season, and depressed economic activity abroad, improvements in exports have grown at a slower pace, reporting an increase of 2.20%. Coming up Wednesday, the first US Vice Presidential debate of 2020 will be hosted in Salt Lake City. Additionally, minutes for the September 15-16 FOMC meeting will be released, highlighting the necessary conditions needed to trigger a rate hike. 

The curve has bull-steepened with UST 10-Year yield down 0.16 bps.

This Week's Events
  10/05 Markit US Services PMI 06:45 Sep F 54.60 54.60 54.60 -  
  10/05 Markit US Composite PMI 06:45 Sep F - 54.30 54.40 -  
  10/06 Trade Balance 05:30 Aug -$66.20b -$67.10b -$63.60b -$63.40b  
  10/06 JOLTS Job Openings 07:00 Aug 6500 6493 6618 6697  
  10/07 MBA Mortgage Applications 04:00 2 Oct - - -4.80% -  
  10/08 Initial Jobless Claims 05:30 3 Oct 820k - 837k -  
  10/08 Continuing Claims 05:30 26 Sep 11400k - 11767k -  
  10/08 Bloomberg Consumer Comfort 06:45 4 Oct - - 49.30 -  
  10/09 Wholesale Inventories MoM 07:00 Aug F 0.50% - 0.50% -
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  This information is provided solely for informational use and is not intended as 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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