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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-31 (+09.5)  
  FN 3.5% Coupon   102-20 (-00.5)  
  Support   3.063%  
  Resistance   1.691%  
  Wednesday, November 20, 2019

Treasury Yields Continue to Decline - Tariffs Imposed on China May Increase

Market opened today’s session with treasuries rallying across all maturities. The 10-Year Treasury yield is currently at 1.7449, 3.77 bps decreased from prior closing of 1.7826.

Stocks took a tumble from record highs as US-China trade talks lose momentum. The Dow Jones and S&P 500 both slipped 0.20%, and the Nasdaq Composite fell 0.30%. China has requested that the US honor the agreement that was made during negotiations and remove the tariffs, which are scheduled to take effect December 15th; Trump has advised that the US will not be removing any tariffs. Trump also announced if China does not move forward with this interim trade deal, the US will raise the impending December tariffs even higher. The yield on 10-Year Treasuries fell four basis points to 1.74%. The yield on 2-year Treasuries slipped two basis points to 1.58%. Germanys 10-Year yield sank three basis points to -0.37%. Britains 10-Year yield dipped three basis points to 0.701%. Japans 10-Year yield declined three basis points to -0.106%. The US Treasury will offer $50 billion at its weekly auction of four-week bills, a decrease of $5 billion from the last offering. The US Treasury will also offer $40 billion at its weekly auction of eight-week bills.

Applications to purchase a home increased 7.00% last week, to its highest level since July, and 7.00% higher than a year ago. However, applications to refinance a mortgage declined 8.00% last week, after showing an increase of 13.00% the previous week. Gordon Sondland, the US ambassador to the European Union, provides his testimony to the House Intelligence Committee later today. The public impeachment inquiry will continue with testimony from Defense Department official, Laura Cooper and State Department official David Hale, who are scheduled to appear together, later this afternoon. This testimony will help the House determine if Trump abused his power in office by pressuring Ukraine President, Volodymyr Zelenskiy to investigate Trumps 2020 campaign rivals.

The curve has bull-flattened with the UST 10-Year yield down 3.77 bps from prior closing.
This Week's Events
  11/18 NAHB Housing Market Index 07:00 Nov 71.00 70.00 71.00 -  
  11/18 Net Long-term TIC Flows 13:00 Sep - $49.50b -$41.10b -$41.20b  
  11/18 Total Net TIC Flows 13:00 Sep - -$37.60b $70.50b $41.90b  
  11/19 Housing Starts 05:30 Oct 1320k 1314k 1256k 1266k  
  11/19 Housing Starts MoM 05:30 Oct 5.10% 3.80% -9.40% -7.90%  
  11/19 Building Permits 05:30 Oct 1385k 1461k 1387k 1391k  
  11/19 Building Permits MoM 05:30 Oct -0.40% 5.00% -2.70% -2.40%  
  11/20 MBA Mortgage Applications 04:00 15 Nov - -2.20% 9.60% -  
  11/21 Philadelphia Fed Business Outlook 05:30 Nov 6.00 - 5.60 -  
  11/21 Initial Jobless Claims 05:30 16 Nov 218k - 225k -  
  11/21 Continuing Claims 05:30 9 Nov 1683k - 1683k -  
  11/21 Bloomberg Consumer Comfort 06:45 17 Nov - - 58.00 -  
  11/21 Leading Index 07:00 Oct -0.20% - -0.10% -  
  11/21 Existing Home Sales 07:00 Oct 5.49m - 5.38m -  
  11/21 Existing Home Sales MoM 07:00 Oct 2.00% - -2.20% -  
  11/22 Markit US Manufacturing PMI 06:45 Nov P 51.40 - 51.30 -  
  11/22 Markit US Services PMI 06:45 Nov P 51.00 - 50.60 51.00  
  11/22 Markit US Composite PMI 06:45 Nov P - - 50.90 -  
  11/22 U. of Mich. Sentiment 07:00 Nov F 95.70 - 95.70 -  
  11/22 Kansas City Fed Manf. Activity 08:00 Nov -2.00 - -3.00 -
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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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