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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-05 (+04.5)  
  FN 2.5% Coupon   104-13.5 (-01)  
  Support   0.747%  
  Resistance   0.599%  
  Wednesday, October 14, 2020

Treasury Yields Fall as Bank Earnings Gain a Boost From Trading

Market opened today's session with treasuries slightly higher across all maturities. 10-year Treasury yield is at 0.7190, 0.82 bp decreased from prior closing of 0.7272.

Stocks opened higher this morning as the banking sector reported a reduction in bad loans, helping stabilize the industry. Wells Fargo Co. and Bank of America saw shares suffer as Wells Fargo reported a 56% plunge in profit on the back of higher costs and reduced income from lower interest rates. Bank of America fell short on expectations as an increase in revenue from trading failed to be on par with competitors. On the other hand, Goldman Sachs set a new earnings record as recent market volatility instigated by the fallout of the COVID-19 pandemic, helped boost fixed income revenue by 49%. JPMorgan Chase Bank Co. and Citigroup reported similar results due to advantageous market circumstances. Regarding US politics, plans for a pandemic relief package face a new hurdle as House Speaker Nancy Pelosi and Senate Majority leader Mitch McConell remain behind there original proposals, aggravating chances of passing a resolution prior to the November elections. On the economic front, MBA Mortgage Applications decreased by 0.70% for the week ending October 9 as refis and purchases fell by 0.30% and 1.60%, respectively. The average 30 year mortgage stood at 3.0%. PPI Final Demand MoM increased by 0.40% as producer prices rose in the month of September, resulting in higher food and hotel service costs. Elsewhere, the dollar fell by 0.2% while the euro and British pound increased by 0.1% and 0.7%, respectively. WTI crude increased by 1.5% to $10.82 a barrel. Gold increased by 0.9% to $1,907.55 an ounce.

The curve has bull-flattened with UST 10-Year yield down 0.82 bp.

This Week's Events
  10/13 NFIB Small Business Optimism 03:00 Sep 100.90 104.00 100.20 -  
  10/13 CPI MoM 05:30 Sep 0.20% 0.20% 0.40% -  
  10/13 CPI YoY 05:30 Sep 1.40% 1.40% 1.30% -  
  10/13 CPI Index NSA 05:30 Sep 260.327 260.280 259.918 -  
  10/13 CPI Core Index SA 05:30 Sep 269.341 269.264 268.747 -  
  10/14 MBA Mortgage Applications 04:00 Oct 9 - -0.70% 4.60% -  
  10/14 PPI Final Demand MoM 05:30 Sep 0.20% 0.40% 0.30% -  
  10/14 PPI Final Demand YoY 05:30 Sep 0.20% 0.40% -0.20% -  
  10/15 Initial Jobless Claims 05:30 10 Oct 825k - 840k -  
  10/15 Continuing Claims 05:30 3 Oct 10550k - 10976k -  
  10/15 Bloomberg Consumer Comfort 06:45 11 Oct - - 48.00 -  
  10/16 U. of Mich. Sentiment 07:00 Oct P 80.50 - 80.40 -
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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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