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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   98-04 (+08.5)  
  FN 3.5% Coupon   102-17 (+04)  
  Support   3.237%  
  Resistance   1.529%  
  Wednesday, November 6, 2019

Treasury Yields Decline After Labor Department Report Shows Productivity Decline

Market opened today’s session with treasuries rallying across all maturities. The 10-Year Treasury yield is currently at 1.8318, 2.66 bps decreased from prior closing of 1.8584.

After hitting a record close yesterday, the Dow Jones fell almost 31 points this morning. The S&P 500 and NASDAQ showed little change at the open but dropped 0.10% and 0.30%, respectively. The Stoxx Europe 600 Index and the UK’s FTSE 100 Index both showed little change as well. The US is still reviewing Chinas request to have tariffs removed on $125 billion worth of Chinese goods; China has suggested that they would like this done before signing "phase one" of the trade deal. A Location for the signing ceremony is still pending to be announced, but the signing should take place later this month. The yield on 10-Year Treasuries and 2-Year Treasuries fell three basis points to 1.82% and two basis points to 1.60%, respectively. Britain’s 10-Year yield decreased four basis points to 0.737%. Germany’s 10-Year yield dipped two basis points to -0.33%. The US Treasury will offer $27 billion at its monthly auction of 10-Year noted, an increase of $3 billion from the last offering.

West Texas Intermediate crude oil gained 0.10% to $57.25 a barrel and gold rose 0.20% to $1,487.51 an ounce. According to the Labor Department, non-farm business employee output per hour showed a decrease of about 0.30%, while labor costs rose 3.60%. The Labor Department reported that productivity in the US declined for the first time in almost four years. Labor productivity declined in the factory sector by 0.10%. Mortgage applications declined 0.10% last week after rising 0.60% the previous week. Purchases were down 2.50% from the previous week, but still 7.00% higher than 1 year ago. Meanwhile, refinance applications actually showed an increase of 1.80% after being down the previous week. Refinance applications are now 144% higher than they were 1 year ago due to rates being so much lower than they were this time last year.

The curve has bull-flattened with the UST 10-Year yield down 2.66 bps from prior closing.
This Week's Events
  11/04 Factory Orders 07:00 Sep -0.50% -0.60% -0.10% -  
  11/04 Durable Goods Orders 07:00 Sep F -1.10% -1.20% -1.10% -  
  11/04 Durables Ex Transportation 07:00 Sep F -0.30% -0.40% -0.30% -  
  11/05 Trade Balance 05:30 Sep -52.40b -52.50b -54.90b -55.00b  
  11/05 Markit US Services PMI 06:45 Oct F 51.00 50.60 51.00 -  
  11/05 Markit US Composite PMI 07:00 Oct F - 50.90 51.20 -  
  11/05 JOLTS Job Openings 07:00 Sep 7063 7024 7051 7301  
  11/06 MBA Mortgage Applications 04:00 1 Nov - -0.10% 0.60% -  
  11/06 Nonfarm Productivity 05:30 3Q P 0.90% -0.30% 2.30% 2.50%  
  11/06 Unit Labor Costs 05:30 3Q P 2.20% 3.60% 2.60% 2.40%  
  11/07 Initial Jobless Claims 05:30 2 Nov 215k - 218k -  
  11/07 Continuing Claims 05:30 26 Oct 1682k - 1690k -  
  11/07 Bloomberg Consumer Comfort 06:45 3 Nov - - 61.00 -  
  11/07 Consumer Credit 12:00 Sep $15.000b - $17.901b -  
  11/08 Wholesale Inventories MoM 07:00 Sep F -0.30% - -0.30% -  
  11/08 Wholesale Trade Sales MoM 07:00 Sep 0.20% - 0.00% -  
  11/08 U. of Mich. Sentiment 07:00 Nov P 95.50 - 95.50 -
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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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