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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   97-11.5 (+07.5)  
  FN 3.5% Coupon   96-29.5 (+03)  
  Support   3.233%  
  Resistance   3.028%  
Monday, November 05, 2018
Treasuries are slightly higher across the curve this morning from Friday’s close. The UST 10-Year yield is currently at 3.190% after closing at 3.213% prior.

Treasuries climbed marginally overnight and opened higher to start the week while U.S. equity futures fluctuated between gains and losses as global markets struggled to sustain last week’s risk-on momentum. With a fairly quiet economic calendar week, investors will primarily be focused on Tuesday’s U.S. midterm elections and this week’s FOMC meeting. Tomorrow’s midterm elections will determine whether Republicans will keep control of Congress. However, polling data shows that the Democrat will take the House, while the Republican will likely retain the Senate. Meanwhile, the Fed is not expected to change their target rate range and IOER rate this week, and investors anticipate little changes to the Official Statement. Elsewhere, White house economic adviser Larry Kudlow downplayed the potential of a quick trade deal between U.S. and China over the weekend after President Trump spoke of the progress that the two nations were making last week; the dollar climbed on the news.

This week’s light economic calendar kicked off with the final reading of the Markit US Services PMI and US Composite PMI for the month of October. The Services PMI reading came in slightly higher from prior at 54.80 versus 54.70, while the Composite PMI reading also saw a slight increase to 54.90 versus 54.80 prior. We also received the October ISM Non-Manufacturing Index which came in higher than expected at 60.30 versus 59.00 per market consensus following a reading of 61.60 prior. The remainder of the week consists of Tuesday’s JOLTS Job Openings for September, Wednesday’s MBA Mortgage Applications and September Consumer Credit, Thursday’s Initial Jobless Claims and Continuing Claims, and Friday’s October Producer Price reports, September Wholesale Inventories, and the preliminary reading of the University of Michigan Statement for November. Later today at 10:00 AM (PT), U.S. will sell $37 Billion 3-Year Notes.

The curve has bull-flattened with the UST 10-Year yield down 2.3 bps from prior closing.
This Week's Events
  11/05 Markit US Services PMI 06:45 Oct F 54.60 54.80 54.70 -  
  11/05 Markit US Composite PMI 06:45 Oct F - 54.90 54.80 -  
  11/06 JOLTS Job Openings 07:00 Sep 7085 - 7136 -  
  11/07 MBA Mortgage Applications 04:00 2 Nov - - -2.50% -  
  11/08 Initial Jobless Claims 05:30 3 Nov 213k - 214k -  
  11/08 Continuing Claims 05:30 27 Oct 1635k - 1631k -  
  11/08 Bloomberg Consumer Comfort 06:45 4 Nov - - 60.30 -  
  11/08 FOMC Rate Decision (Upper Bound) 11:00 8 Nov 2.25% - 2.25% -  
  11/08 FOMC Rate Decision (Lower Bound) 11:00 8 Nov 2.00% - 2.00% -  
  11/09 PPI Final Demand MoM 05:30 Oct 0.20% - 0.20% -  
  11/09 PPI Final Demand YoY 05:30 Oct 2.50% - 2.60% -  
  11/09 U. of Mich. Sentiment 07:00 Nov P 98.00 - 98.60 -  
  11/09 Wholesale Inventories MoM 07:00 Sep F 0.30% - 0.30% -  
  11/09 Wholesale Trade Sales MoM 07:00 Sep 0.40% - 0.80% -  
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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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