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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   97-30.5 (+09)  
  FN 2.5% Coupon   104-10.5 (+04.5)  
  Support   0.747%  
  Resistance   0.599%  
  Monday, November 2, 2020

Treasury Yields Decline Ahead of U.S. Election

Market opened today's session with treasuries higher across all maturities. 10-Year Treasury yield is at 0.8434, 3.03 bps decreased from prior closing of 0.8737.

Equity markets opened higher at the start of a critical week with U.S. elections on Tuesday and a Federal Reserve policy decision on Thursday. The S&P 500 rose 1% after suffering through a sharp decline on Friday. Notable gainers include Dunkin’ Brands Group following news of an $11.3 billion acquisition by Inspire Brands Inc. With global COVID cases on the rise, new lockdowns and travel restrictions, in addition to Libya’s accelerated oil production, had oil prices spiraling to a five month low. In Europe, the Europe Stoxx 600 rose with online grocery retailer Ocado Group Plc leading the way. Equity benchmarks in Europe and Asia saw gains as China’s economy continued to strengthen.

On the economic front, Markit US Manufacturing PMI came in at 53.40, slightly higher than the previously reported value of 53.30. Notably, today's figure marks the fourth consecutive month indicative of expansion. Elsewhere, the ISM Manufacturing Index showcased strong economic growth as it came in at 59.30, higher than the prior reported value of 55.40. Being one of the earliest affected sectors by pandemic shutdowns, the reopening of the economy has allowed manufacturing to recover as stronger sales and capital investments reduced inventories, hence increasing factory orders. In regard to Construction Spending MoM, spending increased by 0.30%, with public construction spending falling 1.70% in September. Tomorrow’s Economic Calendar will report Factory Orders and Durable Goods Orders, both expected at 1.00% and 1.90%, respectively.

The curve has bull-flattened with UST 10-Year yield down 3.03 bps.
This Week's Events
  11/02 ISM Prices Paid 07:00 Oct 61.50 65.50 62.80 -  
  11/02 Construction Spending MoM 07:00 Sep 1.00% 0.30% 1.40% 0.80%  
  11/03 Factory Orders 07:00 Sep 1.00% - 0.70% -  
  11/03 Durable Goods Orders 07:00 Sep F 1.90% - 1.90% -  
  11/03 Durables Ex Transportation 07:00 Sep F 0.80% - 0.80% -  
  11/04 MBA Mortgage Applications 04:00 30 Oct - - 1.70% -  
  11/04 ADP Employment Change 05:15 Oct 650k - 749k -  
  11/04 Trade Balance 05:30 Sep -$63.90b - -$67.10b -  
  11/04 Markit US Services PMI 06:45 Oct F 56.00 - 56.00 -  
  11/04 Markit US Composite PMI 06:45 Oct F - - 55.50 -  
  11/05 Initial Jobless Claims 05:30 31 Oct 735k - 751k -  
  11/05 Continuing Claims 05:30 24 Oct 7200k - 7756k -  
  11/05 Bloomberg Consumer Comfort 06:45 1 Nov - - 46.30 -  
  11/06 Change in Nonfarm Payrolls 05:30 Oct 600k - 661k -  
  11/06 Average Hourly Earnings MoM 05:30 Oct 0.20% - 0.10% -  
  11/06 Average Hourly Earnings YoY 05:30 Oct 4.50% - 4.70% -
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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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