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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-14.5 (+112)   
  FN 3.5% Coupon   97-03.5 (+09)  
  Support   3.233%  
  Resistance   3.028%  
Wednesday, November 07, 2018
Treasuries are moderately higher across the curve this morning from yesterday’s close. The UST 10-Year yield is currently at 3.187% after closing at 3.227% prior.

Treasuries rose overnight and into the open as investors digested Tuesday’s midterm election results which ended as expected with a split Congressional power after the Democrats gained the House while the Republicans retained the Senate. The dollar weakened while U.S. stocks gained on speculation that the divided Congress will produce legislative gridlock in Washington; emerging markets also rallied on the election results. The focus has shifted to what the split of power could mean for Trump’s tax cuts, the ongoing U.S.-China trade rhetoric, and its impact on further fiscal stimulus.

The light economic calendar continued this morning with just the MBA Mortgage Applications for the week ended November 2 which dropped for a second consecutive week. Application activities hit the lowest level in nearly four years as rates continue to rise, falling 4.00% following a 2.50% decline the week prior; borrowing costs hit the highest level since 2010 which adds to challenges for the housing market. Purchase applications were down 5.00% after falling 1.50% the week prior, while refinancing activities dropped 2.50% after declining 3.80% the week prior. Later today at 10:00 AM (PT), U.S. will sell $19 Billion 30-Year Bonds. Then at 12:00 PM (PT), the September Consumer Credit will be released which is expected to decrease to $15.000 Billion from $20.078 Billion in August.

The curve has bull-flattened with the UST 10-Year yield down 4.0 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 7009 7136 7293  
  11/07 MBA Mortgage Applications 04:00 2 Nov - -4.00% -2.50% -  
  11/08 Initial Jobless Claims 05:30 3 Nov 213k - 214k -  
  11/08 Continuing Claims 05:30 27 Oct 1634k - 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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