CHM Blog

Daily Market Analysis

Last Friday the 10-yr rate increased 3 bps to 2.06 and MBS prices were down 16 bps. Early this morning the 10 was down 3 bps, back to Thursday's 2.3% and MBS prices at 8:30 am ET rose +11 bps from Friday's close.

No data today, but this week has a few points that will get attention; May new home sales, May pending home sales, May durable goods, May personal income and spending are the highlights. Also, this week the Treasury will auction a total of $113B of 2s, 5s and 7-yr notes.

While economic data is important, this week's focus will be on trying to handicap the upcoming G-20 meeting this weekend; more specifically the meeting between President Trump and Xi where trade talks may occur. European stocks stumbled, and the dollar hit three-month lows on Monday as hopes waned for progress in China-U.S. trade talks at this week's G20 meeting. Markets are waiting to see if Presidents Donald Trump and Xi Jinping can de-escalate a trade war. What comes out of the discussions will set the tone for the global outlook; if the talks fail, Trump will add more tariffs and push the global economic outlook more toward a recession idea. Going toward the weekend meeting, the US pushed harder, banning Huawei products from US companies. The US Commerce Department said on Friday it was adding several Chinese companies and a government-owned institute involved in supercomputing with military applications to its national security "entity list" that bars them from buying US parts and components without government approval. China is retaliating by banning Fed Ex.

A Fed in uncertainty is within the ranks: Federal Reserve officials were divided Friday over how seriously to treat a slide in inflation, with one top policymaker saying the Fed was "close" to its inflation target, and three others warned the weak price increases posed major risks. The Fed may need to attack with lower interest rates. Inflation, or the lack of it, has been confusing for economists and it isn't any different at the Fed. A rate cut is coming at the end of July and is already affecting markets; interest rate futures markets currently see a 100% probability of a rate cut then, with the only debate in trading circles over whether the cut will 25 basis points or twice that. Roughly half of Fed officials see no rate reduction as likely appropriate this year, and roughly half see a cut of up to half a percentage point as warranted. Once the FOMC "blackout" was lifted (no Fed official is supposed to speak a week before an FOMC meeting) speeches and interviews began last Friday. Tomorrow Fed chair Powell and James B. Bullard will be speaking; Bullard was one that didn't believe a rate cut is necessary.

At 9:30 am the DJIA opened up +37, the NASDAQ added +11, and the S&P increased by +2. The 10-yr stood at 2.04%, down -2 bp. MBS prices were up +6 bps from Friday’s close and -7 bps from 9:30 Friday.

We don't look for much change in US financial markets today or likely not much this week with US/China trade looming with the meeting between Trump and Xi this coming weekend. In the meantime, US and Chinese negotiators will begin tomorrow to attempt to defuse the current loggerhead. Seven weeks ago there was almost a deal worked out but it blew up at the last minute. It's hard to handicap what can be accomplished now; a non-agreement will damage the global, US and China economic outlook; President Trump is still threatening more tariffs.

Technically the bond and mortgage markets continue their positive views, but fundamentally the recent drop in rates is increasingly too bullish. Rates at the long end have discounted all of a good news scenario and should settle down this week. The trade talks this weekend should keep interest rates from increasing much. So much is riding on what will come of the meeting between Trump and Xi. The 10 is at 2.04% now will need a lot of negative news to breach it and hold it below the 2 handle. A 1 handle is a psychological hurdle.

This week’s Calendar:

Tuesday,

9:00 am April Core/Logic 20 city home price index (+0.5% NSA)

  • April FHFA home price index (+0.2%)

10:00 am May new home sales (+1.0%)

  • June consumer confidence index (132.0 from 134.1 in May)

1:00 pm $40B 2 yr. note auction

Wednesday,

7:00 am weekly MBA mortgage applications

8:30 am May durable goods orders (0.0%, ex transportation orders +0.1%, core capital goods +0.2%)

  • May US trade deficit (-$71.9B; exports -4.2%, imports -2.7%)

1:00 pm $41B 5 yr. note auction

Thursday,

8:30 am Q1 final GDP (3.1% unchanged from the prelim, price index +0.8%, core price index +1.2%; all unchanged from the prelim last month)

  • Weekly claims (218K +2K)

10:00 am May NAR pending home sales (+0.6% from -1.5% in Apr)

1:00 pm $32B 7 yr. note auction

Friday,

8:30 am May personal income and spending (income +0.3%, spending +0.4%; PCE +0.1% yr./yr. 1.4%; core PCE +0.1% yr./yr. +1.5%)

9:45 am June Chicago Purchasing Mgrs. index 54.0 from 54.2 in May)

10:00 am U. of Michigan consumer sentiment index (97.9 unchanged from mid-month)

  • G-20 meeting in Japan

PRICES @ 10:00 AM

10 yr. note: 2.04% -2 bp

5 yr. note: 1.77% -3 bp

2 Yr. note: 1.76% -2 bp

30 yr. bond: 2.57% -2 bp

Libor Rates: 1 mo. 2.404%; 3 mo. 2.349%; 6 mo. 2.220%; 1 yr. 2.202% (6/21/19)

30 yr. FNMA 3.5: @9:30 102.19 +6 bp (-7 bp from 9:30 Friday)

15 yr. FNMA 3.0: @9:30 101.96 unch (-4 bp from 9:30 Friday)

30 yr. GNMA 3.5: @9:30 103.17 +3 bp (-2 bp from 9:30 Friday)

Dollar/Yuan: $6.8783 +$0.0084

Dollar/Yen: 107.42 +0.10 yen

Dollar/Euro: $1.1381 +$0.0012

Dollar Index: 96.13 -0.09

Gold: $1410.30 +$10.20

Crude Oil: $57.54 +$0.11

DJIA: 26, 764.97 +45.84

NASDAQ: 8023.93 -7.78

S&P 500: 2949.73 -0.73

About Richard Sardella

Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

About This Report And Disclosure Information

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

Posted in:General
Posted by Richard Sardella MLO.100007700/NMLS 233568 on June 24th, 2019 10:00 AM
Daily Market Analysis

We end our day at 4:00 pm ET; normally the final hour of trade doesn't change much. Yesterday was a different story. At 4:00 MBS prices were +9 bps on the session and down 7 bps from 9:30 am ET. In the final 45 minutes of trading to 5:00 pm MBS prices dropped 13 bps points for a dally fall of 20 bps from 9:30. The 10-yr note yield in the final hour increased to 2.03%, unchanged on the session but up 2 bps from 4:00 pm.

This morning the 10-yr remained unchanged from yesterday at 2.03% and MBS prices at 9:00 am -2 bps from yesterday’s close.

What we didn't know yesterday was that President Trump had called off an attack on Iran; a White House official has confirmed the US called off military strikes against Iran last night. The latter warned Tehran via Oman that an attack was imminent, according to a Reuters report this morning that cited unnamed Iranian officials.

There was no opportunity for gain apart from stocks and now a move to corporate bonds. The total return indexes for the US investment-grade corporate bonds, high-yield, sovereign and quasi-sovereign debt have risen to record levels – the first time since July 2016 that all these asset classes have traded at their peaks simultaneously. Low-cost money driving increased borrowing by corporations as debt balloons. There is a present conviction that inflation is dead and central banks are increasingly edgy about the economic global future.

At 9:30 am the DJIA opened down -16, the NASDAQ dropped -23, and the S&P by -2. The 10-yr stood at 2.03%, unchanged from yesterday. MBS prices -2 bps from yesterday and -22 bps from 9:30 yesterday. This is quadruple witching day, expirations of futures contracts in stocks and bonds.

At 9:45 am the June PMI composite index was expected at 50.9. As released, it was at 50.6. The manufacturing component was expected at 50.4, but dipped to 50.1, while services were expected at 50.9 and ended up at 50.7, all hugging the key pivot at 50.0. The flash Composite Purchasing Managers' Index (PMI) provides an early estimate of current private sector output by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. The flash data are released around 10 days ahead of the final report.

At 10:00 am May existing home sales were reported up 2.5% to 5.34 mil units; yr/yr -1.1%.

While the 10-yr rate dropped to 1.97% yesterday, it closed at 2. 03%. Moving lower than 2.00% is a psychological issue. Our technicals remain positive for the wider look, but unless there is increasing geopolitical issues (Iran) or a change in the US/China trade talks, it will be difficult to crack below 2.00%. The rate markets need to consolidate this week's improvements; near term the 10 yr should hold below 2.06% technically. If not, then 2.11% becomes the hard support. MBS prices and rates likely to follow the 10 yr consolidating recent rate decline.

PRICES @ 10:00 AM

10 yr. note: 2.05% +2 bp

5 yr. note: 1.80% +2 bp

2 Yr. note: 1.80% unch

30 yr. bond: 2.56% +4 bp

Libor Rates: 1 mo. 2.403%; 3 mo. 2.343%; 6 mo. 2.21`6%; 1 yr. 2.161% (6/20/19)

30 yr. FNMA 3.5: @9:30 102.25 -3 bp (-22 bp from 9:30 yesterday)

15 yr. FNMA 3.0: @9:30 101.99 -4 bp (-18 bp from 9:30 yesterday)

30 yr. GNMA 3.5: @9:30 103.19 -2 bp (-22 bp from 9:30 yesterday)

Dollar/Yuan: $6.8701 +$0.0182

Dollar/Yen: 107.53 +0.23 yen

Dollar/Euro: $1.1329 +$0.0037

Dollar Index: 96.52 -0.11

Gold: $1402.00 +$5.10

Crude Oil: $57.39 +$0.32

DJIA: 26,760.58 +7.41

NASDAQ: 8029.86 -21.48

S&P 500: 2949.54 -4.67

About Richard Sardella

Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

About This Report And Disclosure Information

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

Posted in:General
Posted by Richard Sardella MLO.100007700/NMLS 233568 on June 21st, 2019 8:55 AM
Daily Market Analysis

After the FOMC yesterday interest rates fell to new lows for this run; overnight last night the bellwether 10 yr. note yield broke 2.00% to 1.99%. By 8:30 am ET though back to 2.02% -1 bp from yesterday’s close. MBS prices early were up 15 bps from yesterday but following the 10 at 8:30 +9 bps from yesterday.

Weekly claims at 8:30 am ET 222K +3K. June Philadelphia Fed business index dropped to a weak 0.3% on forecasts of 11.0 and down from 16.6 in May. Q1 current account deficit expected at -$124.3B declined to -$130.4B.

US stock indexes didn’t move much yesterday; the DJIA +38, NASDAQ +33, and S&P +9. Stock investors sat back as the FOMC and Powell issued what can be considered a warning about the economic growth here and globally. This morning in futures trading the DJIA was up 250 points.

Next week at the G-20 meeting, President Trump and Xi have agreed to meet; markets and some optimistic analysts talking a deal; not likely to happen though. That a meeting is scheduled and both sides already preparing is a positive and a welcome step, but no deal should be expected. There are huge issues needed to be resolved, and since there have been no negotiations for six weeks, it is almost a do-over to restart. The sticking points are intellectual property rights, and how to start leveling the field; which businesses will be chosen as first responders, that is China’s decision. All things considered the meeting next week is good, but keep in mind Trump appears reluctant to bend much and so too Xi.

As we have noted, Iran and the US situation is escalating; don’t hear much from the TV media about it and market gurus don’t want to make too much of it. Tensions though are increasing; Iran shot down an American spy drone near the entrance to the Persian Gulf under disputed circumstances, escalating tensions in a region that’s been on the brink of a military confrontation for weeks. Iranian media said the aircraft was hit inside Iranian airspace. The US said the Global Hawk drone was flying in international airspace when it was shot down by an Iranian missile over the Strait of Hormuz. The situation adds an additional reason for investors to move into safe positions if military action begins and it isn’t going unnoticed even if it is below the fold and on page 4. The downing of the drone is fanning fears that a military clash between the US and Iran is just a matter of time. “We are seeing an escalation and the frequency of attacks is concerning even though they are still mostly minor,’’ said Renad Mansour, a research fellow in the Middle East and North Africa program at Chatham House. “People across the region are starting to make preparation for the possibility of a trigger coming from somewhere.’’ “I think the situation is very grave because of the aggressive behavior of Iran,” Adel al-Jubeir, Saudi Arabia’s minister of state for foreign affairs told reporters in London.

Gold continues to increase, another safety play as global tensions increase, particularly recently in the mid-east. Our work implies gold will move up to at least $1700.00/oz. Crude oil this morning +$2.40 from yesterday at $56.15 at 9:30 this morning.

At 10:00 am ET May leading economic indicators, not a first tier data point, expected +0.1%, as released unch.

The decline in rates yesterday and this morning isn’t just about the FOMC yesterday or on continuing weakness in the economic outlook (see June Philadelphia Fed index above). Increasing tensions with Iran are very much in play here. Every day the situation is moving close to military confrontation, and savvy investors are moving to safety in gold and US treasuries.

PRICES @ 10:00 AM

10 yr. note: 2.00% -3 bp

5 yr. note: 1.72% -5 bp

2 Yr. note: 1.73% -3 bp

30 yr. bond: 2.52% -2 bp

Libor Rates: 1 mo. 2.383%; 3 mo. 2.386%; 6 mo. 2.300%; 1 yr. 2.297% (6/19/19)

30 yr. FNMA 3.5: @9:30 102.47 +16 bp (+53 bps from 9:30 yesterday)

15 yr. FNMA 3.0: @9:30 102.17 +16 bp (+36 bps from 9:30 yesterday)

30 yr. GNMA 3.5: @9:30 103.39 +17 bp (+49 bps from 9:30 yesterday)

Dollar/Yuan: $6.8502 -$0.0534

Dollar/Yen: 107.71 -0.38 yen

Dollar/Euro: $1.1300 +$0.0074

Dollar Index: 96.67 -0.45

Gold: $1386.40 +$37.40

Crude Oil: $56.00 +$2.24

DJIA: 26,745.19 +241.19

NASDAQ: 8076.16 +88.84

S&P 500: 2953.70 +27.24

About Richard Sardella

Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

About This Report And Disclosure Information

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

Posted in:General
Posted by Richard Sardella MLO.100007700/NMLS 233568 on June 20th, 2019 8:57 AM
Daily Market Analysis

Markets have been anticipating today for the past two weeks; the conclusion of the FOMC meeting at 2:00 pm ET this afternoon. No rate cut at today's meeting, but how the FOMC frames its policy statement and when markets might expect a rate cut of 0.25%, the present consensus is at the July meeting at the end of July, and another cut before the end of the year. Fed chief Jerome Powel under attack from President Trump for not lowering rates sooner has a tight rope to walk, not wanting the Fed to look like an extension of the administration and continue to drive the point that the Fed should remain independent of political pressures but adjusting policy as economic conditions warrant.

Trump vs. Powell: recent news that Trump was considering demoting Powell to just a governor, removing him as chairman is a very bad idea. Trump frustrated that the Fed is dragging its feet keeping the Federal Funds rate too high for too long. Most believe Trump is wrong, and he has to leave the Fed alone and retain its independence. It is a slippery slope that should not happen. If President Trump can demote the chairman, the future of the Fed's credibility would be subject to whims of the next and future presidents and would become a political tool reducing its global credibility as the world's key central bank. Trump will lean heavily on the growing economy in his re-election bid, if the economy slips, he can then blame Powell and the Fed for not reacting to his plea for lower interest rates sooner.

Weekly MBA mortgage applications after a huge increase in the prior week slowed last week. Overall apps -3.4%, purchase apps -4.0% and refinance apps -4.0%. Not much of a surprise given the week before apps were up 26.8%, purchase apps +10.0% and refinances +47.0%. Year-on-year, the purchase index remains in the plus column at a constructive 4.0%.

More data that confirms inflation in Europe are at levels here in the US, holding at 2.0%. Germany's May PPI decreased 0.1% m/m (expected 0.2%; last 0.5%), but grew 1.9% yr./yr. (expected 2.1%; last 2.5%). U.K.'s May CPI increased 0.3% m/m, as expected (last 0.6%), growing 2.0% yr./yr., as expected (last 2.1%). May House Price Index increased 1.4% yr./yr. (expected 1.1%; last 1.4%). Trade between nations more negative and not necessarily due to the US/China trade deadlock; Japan showed the sixth consecutive month of falling exports. Exports to Asia dropped 12.1% yr./yr. while exports to the EU contracted 7.1% yr./yr., suggesting the U.S.-China trade dispute is not the sole reason for the ongoing slowdown in global trade. The U.S. Dollar Index is down 0.1% at 97.55, hovering just above its 50-day moving average (97.50).

At 9:30 am ET the DJIA opened +50, NASDAQ +18, S&P +5. 10 yr. at 9:30 2.09% +3 bps and where it traded on Monday before dropping 3 bps yesterday. MBS prices -6 bps from yesterday's close and -14 bps from 9:30 yesterday.

There should not be much change in financial markets now until this afternoon's FOMC policy statement, Fed quarterly forecasts for inflation and GDP at 2:00 pm and Powell's press conference at 2:30 pm.

PRICES @ 10:00 AM

10 yr. note: 2.09% +3 bp

5 yr. note: 1.87% +4 bp

2 Yr. note: 1.90% +3 bp

30 yr. bond: 2.57% +2 bp

Libor Rates: 1 mo. 2.382%; 3 mo. 2.386%; 6 mo. 2.298%; 1 yr. 2.264% (6/18/19)

30 yr. FNMA 3.5: @9:30 101.94 -6 bp (-14 bps from 9:30 yesterday)

15 yr. FNMA 3.5: @9:30 102.93 +2 bp (+4 bps from 9:30 yesterday)

30 yr. GNMA 3.5: @9:30 102.88 -8 bp (-22 bp from 9:30 yesterday)

Dollar/Yuan: $6.9042 +$0.0009

Dollar/Yen: 108.44 unch

Dollar/Euro: $1.1202 +$0.0009

Dollar Index: 97.52 -0.13

Gold: $1347.60 -$3.10

Crude Oil: $53.33 -$0.57

DJIA: 26,534.54 +69.00

NASDAQ: 7951.78 -2.11

S&P 500: 2921.27 +3.52

About Richard Sardella

Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

About This Report And Disclosure Information

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

Posted in:General
Posted by Richard Sardella MLO.100007700/NMLS 233568 on June 19th, 2019 9:31 AM
Daily Market Analysis

Mario Draghi lit up Europe and US markets today sending the 10 yr. treasury note to its lowest level. Its current improvement to 2.03% 6 bps lower than yesterday's close. Mario Draghi said additional stimulus might be needed if the economic outlook doesn't improve. Trump weighed in, accusing the ECB in a tweet of weakening its currency to make the region's exports more competitive. Three of the central bank's officials told Bloomberg an interest-rate cut would probably be the first step in any stimulus. Investor confidence in Germany's economic outlook worsened dramatically in June, adding to expectations of ECB support. Not news, at least to us and most others, that the global economic outlook is deteriorating; all central banks now appear to be concerned enough to try propping up economies with lower rates. Australia, Russia, India, and Chile have recently loosened policy. The Reserve Bank of Australia said today that further easing is more likely than not. Besides the Fed, the Bank of Japan and Bank of England will meet this week.

Trump on the comments by Draghi over the idea that the EU may have to add stimulus, accusing Draghi of currency manipulation to enhance its exports. His (Draghi) comments sent the euro down by a quarter of a percent against the U.S. dollar while stocks erased early losses and bond yields fell further. Not sure why it is OK for Trump to chastise the Fed for keeping rates "high" while when other nations want to add stimulus it is seen as currency manipulation. Draghi said the ECB might need to cut interest rates or purchase assets if inflation in the Eurozone continued to lag its target range; that isn't new, the ECB only recently backed off of asset purchases that it had been doing for years prior.

Eurozone's April trade surplus totaled EUR15.70B (expected EUR8.80B; last EUR23.20B). May CPI increased 0.1% m/m (expected 0.2%; last 0.7%), growing 1.2% yr./yr., as expected (last 1.7%). May Core CPI decreased 0.1% m/m (expected 0.9%; last 0.9%), but was up 0.8% yr./yr., as expected (last 1.3%). June ZEW Economic Sentiment fell to -20.2 (expected -3.6) from -1.6. Germany's June ZEW Economic Sentiment fell to -21.1 (expected -5.7) from -2.1 while ZEW Current Conditions decreased to 7.8 (expected 6.0) from 8.2.

This morning May housing starts and permits; starts were expected at 1239K, as reported 1269K. April starts were revised from 1235K to 1281K; starts as a percentage based on the April revision were down 0.9%. Permits expected 1290K, as released 1294K as a percentage from the April revision (1296K to 1290K) +0.3%. Residential investment has fallen for five straight quarters, but the second quarter for starts is looking positive. Yet, the gain is centered in multi-units which pack less GDP punch than the larger single-family category. Starts for single-family homes were actually very weak in May, at an 820,000 annual rate for a 12.5% year-on-year decline. Multi-units, in contrast, are up a yearly 13.7% at a 449,000 rate. Completions are a major negative in today's report, falling to a 1.213 million rate and not providing new supply to a home sales market that is trying to build momentum.

At 9:30 the DJIA opened +155, NASDAQ +72, S&P +16. 10 yr. note 2.03% -6 bps from yesterday. MBS prices at 9:30 +20 bps from yesterday's close and +20 bps from 9:30 yesterday.

Still watching and listening closely to the Iran escalation; still an increasing risk.

Nothing left today; the FOMC meeting is getting underway, but nothing will occur until 2:00 pm tomorrow when the policy statement, the Fed's quarterly forecasts, and Powell's press conference. The market reactions to Draghi's comments seem a little too much but can't argue against the tape. All key global rates have dropped today even though the Fed is still somewhat a wild card about how it frames its policy, rate cuts by the Fed are trading with two cuts this year.

Didn't take long for the knee jerk and overboard rally to lose its gleam; by 10 the 10 note rate after dropping to 2.03% is back to 2.06% down 3 bps from yesterday. MBS prices at 9:30 am ET +20 bps, at 10:00 +5 bps. What isn't slipping is the stock market as buyers overwhelm sellers in early trade today. The driver, President Trump is saying he had a call from China's XI, and now a meeting at the G-20 is more likely than yesterday.

PRICES @ 10:00 AM

10 yr. note: 2.07% -2 bp

5 yr. note: 1.84% -1 bp

2 Yr. note: 1.87% -1 bp

30 yr. bond: 2.56% -1 bp

Libor Rates: 1 mo. 2.390%; 3 mo. 2.418%; 6 mo. 2.308%; 1 yr. 2.286% (6/17/19)

30 yr. FNMA 3.5: @9:30 102.08 +20 bp (+20 bp from 9:30 yesterday; at 10:00 +5 bps from yesterday and +5 bps from 9:30 yesterday)

15 yr. FNMA 3.5: @9:30 102.99 +12 bp (+16 bp from 9:30 yesterday)

30 yr. GNMA 3.5: @9:30 103.08 +22 bp (+24 bp from 9:30 yesterday)

Dollar/Yuan: $6.9157 -$0.0101

Dollar/Yen: 108.66 +0.12 yen

Dollar/Euro: $1.1200 -$0.0017

Dollar Index: 97.65 +0.09

Gold: $1348.00 +$5.10

Crude Oil: $53.15 +$1.22

DJIA: 26,449.97 +337.94

NASDAQ: 7992.29 +147.26

S&P 500: 29582.+36.15

About Richard Sardella

Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

About This Report And Disclosure Information

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

Posted in:General
Posted by Richard Sardella MLO.100007700/NMLS 233568 on June 18th, 2019 9:30 AM
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When coffee and equity go hand in hand

Starbucks. We search for them on freeways as if they are ports in a storm, use them as an oasis when shopping to rest our weary feet, meet business people there for non-threatening sales conversations and interviews or even introduce ourselves to blind dates there — all with the feeling that they are safe, public places with clean restrooms, cozy atmospheres, and comfortable surroundings. Even if we work from home, we occasionally take our laptops to one to place ourselves in a more creatively-conducive atmosphere.

Starbucks was founded by Jerry Baldwin, Gordon Bowker, and Zev Siegel, opening its first store in 1971 across the street from the historic Pike Place Market in Seattle. The three founders had two things in common; they were all coming from academia, and they all loved coffee and tea.

Whatever the reason people flock to them, Starbucks is indeed more than a coffee shop chain. In the U.S. they are a way of life, evidenced by recent Harvard Business School study showing they can improve values in any neighborhood in which they suddenly appear. It's called the "Starbucks effect."

While it's not the go-to place for everyone, most will recognize Starbucks as an asset to homeowners who live nearby. Between 1997 and 2013, homes closer to the branded coffee shop increased in value by 96%, compared to 65% for all U.S. homes — 31% more than that of all U.S. homes. Boston saw the largest appreciation over this time where home values increased 171%, 45% more than all the homes in Boston. But do people specifically search out neighborhoods containing a Starbucks when looking for a home? If they don't, maybe they should.

The study examined data from Yelp!, the online business review platform, Zillow, and the United States Census data, and an interesting trend was found. When a new Starbucks is introduced into a zip code, home values increased by 0.5 % within a year. But the chicken-or-the-egg comparison also enters the picture: is the opening of a new Starbucks store a sign home prices are increasing or because Starbucks stores bring more affluent customers to the area? Whichever the reason, it was determined that it was a bellwether that a neighborhood could be changing.

The study showed that a new Starbucks is a sign of gentrification, which means changing demographics as well. Some savvy long-term investors look for promising locations lacking the coffee house and then watch as one opens and their investments steadily rise in value.

This Week's Mortgage Rate Summary

How Rates Move:

Conventional overnment (FHA and VA) lenders set their rates based on the pricing of Mortgage Backed Securities (MBS) which are traded in real time, all day in the bond market.  This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events.  When MBS pricing goes up, mortgage rates or pricing generally goes down.  When they fall, mortgage pricing goes up.  Tracking these securities real-time is critical.  For more information about the rate market, contact me directly.  I’m among few mortgage professionals who have access to live trading screens during market hours.

Rates Currently Trending: Neutral

Mortgage rates are trending sideways this morning.  Last week the MBS market worsened by -20 bps.  This was enough to move rates or fees slightly higher. We saw modest volatility throughout the week.

This Week's Rate Forecast: Neutral

Three Things: These are the three areas that have the greatest ability to impact mortgage rates this week. 1) Central Bank, 2) Geopolitical, 3) Trade War

1) Central Bank: The focus will be on our Federal Reserve, but there is a lot of Central Bank action globally. Staring in the U.S., the FOMC will conclude on Wednesday and will have their Interest Rate Decision, Policy Statement, Live Press Conference with Fed Chair Powell and the release of their Economic Projects. It's the latter that may get the lions-share of attention by long bond traders. While everyone seems to be "jawboning" for a rate decrease, the simple truth is that the most recent round of economic data does not warrant a rate cut at this meeting. The market will, therefore, be looking for any direction in the policy statement or from Powell on the likelihood of a July 31st cut (which the stock market is currently pricing in). As a result, the economic projections and the corresponding "dot plot" chart will get a ton of attention to see if the aggregate bias' from individual Fed members shifts towards a cut in 2019 at all.

Besides our own Fed, we have very key Central Bank announcements out of the Bank of England and the Bank of Japan on Thursday. Rounding out the barrage of interest rate decisions are: Norway, Brazil, Taiwan, Indonesia, Philippines, and Colombia.

2) Geopolitical: Brexit will remain a key focus as the list of contenders to be the next Prime Minister (and therefore the fate of Brexit) will be narrowed down to just 2 by the end of the week. Iran will continue to get a lot of attention as each week, tensions between Iran and the U.S. rise. Their announcement that they will have over the maximum allowed of uranium stockpiled in 10 days. Italy and their threat of creating its own currency and their recent friction with the EU will also be closely watched.

3) Trade War: Every single comment from senior cabinet officials on both sides will get attention from traders as the G20 meeting is quickly approaching in Japan.

This Week's Potential Volatility: Average

Many events can move rates this week as denoted above. One of the keys to rate volatility this week will be our Fed's actions and comments about the economy and the future of rates.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

About Richard Sardella

Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

About This Report And Disclosure Information

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

Posted in:General
Posted by Richard Sardella MLO.100007700/NMLS 233568 on June 17th, 2019 7:24 PM
Daily Market Analysis

Quiet early today; Stock indexes in futures trade were little changed from Friday, the 10 yr. at 8:00 am ET unchanged at 2.09%, early prices in MBSs down about 6 bps from Friday.

At 8:30 am ET the June Empire State manufacturing index plunged to -8.6 from 17.8 in May and on expectations of 10.0. No noticeable reaction to the deep decline. New orders are now at minus 12.0 for the lowest reading since January 2016 with the monthly change from May at negative 21.7 for the steepest single-month decrease since November 2010. Unfilled orders are down 17.9 points this month to minus 15.8 with employment at minus 3.5. Shipments are still moving out the door, at plus 9.7 this month but down 6.6 points from May. Prices readings are mixed with input pressures remaining elevated at 27.8 but selling prices easing nearly 6 points to plus 6.8. Topping off June's disappointment is the sample's outlook which is measurably less optimistic this month, at 25.7 for a nearly 5 point decline from May. The slide may be due to the tariffs, but it is too soon to hang it all on tariffs.

At 9:30 the DJIA opened +26, NASDAQ +27, S&P +5. 10 yr. at 9:30 unchanged from Friday at 2.09%. MBS prices slightly weaker; -5 bps from Friday's close and -9 bps from 9:30 Friday.

At 10:00 am June NAHB housing market index, expected at 67 fell to 64 and down from 66 in May; disappointing.

This week's obvious main event is the FOMC meeting that begins tomorrow with the policy statement at the meeting's conclusion at 2:00 pm Wednesday. Also at 2:00 Wednesday the Fed's quarterly forecasts for inflation and GDP for the next 24 months will be released; recent updates to the quarterly forecasts have been weakening from quarter to quarter. There is no belief the FOMC will cut the Federal Funds rate at this meeting; current belief remains that a 0.25% cut in the Federal Funds rate will happen at the July meeting at the end of the month (7/31). How the FOMC frames the policy statement and its outlook for the economic outlook as it affects the outlook due to the tariffs. President Trump beginning to see increased resistance from US businesses over the tariffs (The Bank of Japan also meets this week).

Nothing new on trade; China facing massive resistance from Hong Kong residences as it tries to tighten its grip on citizens. Riots and protests continue. China doubled down on its support for Hong Kong leader Carrie Lam on Monday after days of protests in the Chinese-ruled city over a planned extradition bill, and a source close to Lam said Beijing was unlikely to let her go even if she tried to resign. Crowds are relentless, calling for the bill to be killed and for her to step down. Meanwhile, the US turning some focus on Iran and the recent attacks on oil tankers in the Gulf of Oman, blaming Iran for the actions. Looks now like there will be no talks until at least the G-20 meeting on the 28th of this month; even then no meeting as of yet between Trump and XI.

Tariffs are increasingly roiling businesses in the US, businesses lining up to testify at a public hearing that starts today in Washington. About 320 officials from U.S. manufacturers, retailers, and other companies and trade groups are set to appear over seven days of a hearing. It's the fourth round of hearings after Trump levied duties on $250 billion of products last year. As talks on a trade deal with China faltered last month, he ordered a tariff increase to 25% from 10% on $200 billion of goods and targeted an additional $300 billion in products -- including consumer goods the administration tried to spare in previous rounds. (Bloomberg).

This Week's Calendar:

Monday,

8:30 am June Empire State manufacturing index (expected at 10.0 from 17.8 in May, as reported the index dropped to -8.6)

10:00 am June NAHB housing market index (expected at 67 from 66 in May, as reported

Tuesday,

8:30 am May housing starts and permits (starts 1.240 mil, +0.4%: permits 1290 mil +0.4%)

10:00 am FOMC meeting begins

Wednesday,

7:00 am weekly MBA mortgage applications

2:00 pm FOMC policy statement and FOMC quarterly forecasts

2:30 pm Jerome Powell press conference

Thursday,

8:30 am weekly jobless claims (219K -3K)

  • June Philadelphia Fed business index (11.0 from 16.6 in May)
  • Q1 current account deficit (-$123.9 from -$134.4B in Q4 2018)

10:00 am May leading economic indicators (+0.1%)

Friday,

10:00 am May existing home sales (5280K +2.7%)

PRICES @ 10:00 AM

10 yr. note: 2.10% +1 bp

5 yr. note: 1.85% +1 bp

2 Yr. note: 1.87% unch

30 yr. bond: 2.60% +0.5 bp

Libor Rates: 1 mo. 2.381%; 3 mo. 2.402%; 6 mo. 2.277%; 1 yr. 2.246% (6/14/19)

30 yr. FNMA 3.5: @9:30 101.88 -5 bp (-9 bp from 9:30 Friday)

15 yr. FNMA 3.5: @9:30 102.83 -9 bp (-20 bp from 9:30 Friday)

30 yr. GNMA 3.5: @9:30 102.83 -6 bp (-8 bp from 9:30 Friday)

Dollar/Yuan: $6.9249 -$0.0005

Dollar/Yen: 108.59 +0.04 yen

Dollar/Euro: $1.1238 +$0.0027

Dollar Index: 97.40 -0.17

Gold: $1345.70 +$1.20

Crude Oil: $52.07 -$0.44

DJIA: 26,119.33 +28.55

NASDAQ: 7859.04 +62.38

S&P 500: 2894.28 +7.30

About Richard Sardella

Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

About This Report And Disclosure Information

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

Posted in:General
Posted by Richard Sardella MLO.100007700/NMLS 233568 on June 17th, 2019 10:10 AM
Daily Market Analysis

Early this morning (8:00 am ET) the 10 yr. was down to 2.07% -3 bps from yesterday; it didn't last long, however, by 8:30 back to unchanged from yesterday at 2.10%. The first MBS quotes this morning general unchanged from yesterday.

At 8:30 am ET May retail sales; sales were expected to have increased 0.7% were up 0.5%. Excluding auto sales expectations were +0.4%, as reported +0.5%. Less autos and gas thought to be +0.4%, increased 0.5%. April retail sales originally reported -0.2% was revised to +0.3%; excluding autos April revised from +0.1% to +0.5%, less autos and gas from -0.2% to +0.3%. Strength in general merchandise, a large component that includes department stores and which has posted gains of 0.7 percent in May and 0.8 and 1.2 percent in April and March. Non-store retailers, at 1.4 percent in May, have shown similar strength with restaurants, at May's 0.7 percent, also very solid in a sign of discretionary strength. This report will increase the Atlanta Fed GDPNow forecast.

A report on business conditions released by Morgan Stanley declined to the lowest reading since 2008. Indicators from services to manufacturing and hiring all cooled, dragging the headline index to 13, far below the 33 threshold consistent with positive real economic growth, economists at Morgan Stanley led by Ellen Zentner wrote in a note. Signs of slowing economic expansion have fueled speculation the Federal Reserve will cut rates this year, spurring this month's rallies in bonds and stocks. The services sub-index dropped to the lowest since July 2012, while gauges of hiring, capital expenditure plans, and pricing power all fell. According to the comments, the uncertainty around trade policy is probably not the main cause, the economists wrote. The survey respondents pointed to headwinds, including weaker commodity prices for oil-related companies and a deflating consumer spending boom for retailers.

The oil tanker dust-up in the Gulf of Oman another confusing situation. The US said Iran was responsible, and as you would expect, Iran said it wasn't. So far, the US hasn't produced any evidence. Yesterday Secretary of State Mike Pompeo ran through a list of recent incidents the U.S. has pinned on Iran, from previous tanker blasts to missiles fired at a Saudi airport to a car bomb in Afghanistan. The increasing tensions between the US and Iran are supporting elements for US treasuries on safety movement; not a huge run to safety but enough to add fundamental support for interest rates, at least near term. US and Iran ebb and flow with headlines, unless it leads to more than words markets will focus but not react much to the situation. For all of the ink about crude prices increasing, US oil prices haven't increased much after the 28% decline over the past month.

At 9:15 May industrial production and capacity utilization; production +0.4% on forecasts of +0.2%, capacity utilization 78.1% about in line with estimates.

At 10:00 the U. of Michigan consumer sentiment index expected at 98.4 dropped to 97.9 and is down from May's final reading at 100.00. Inflation index dropped in the report. In a very important reading in this report and one that will raise the pitch of the rate-cut debate at next week's FOMC is a sharp fall in long-term inflation expectations, at 2.2 percent for a giant 4 tenths decline from May in the 5-year outlook and the lowest reading in 40 years of available data on this question. The year-ahead reading for inflation expectations is down 3 tenths this month to 2.6 percent.

Next week the FOMC meeting on Tuesday and Wednesday, unless there is a rapid increase in geopolitical conditions (Iran and China) we don't expect much movement in stocks or bonds. No rate cut from the FOMC next week but the policy statement and Powell's press conference will set the course and outlook for a cut in July that markets widely expect and built into investor and trader thinking now. Investors have flocked to safe assets such as gold and the Japanese yen. Gold hit its highest level since April 2018 this morning, and our work suggests gold may increase to $1500.00/oz. soon (now $1351.00) and up $7.30 today after increasing $7.80 yesterday. Since May 21st gold has increased 7%.

By 10:00 MBS prices have recovered a little from 9:30 and the 10 yield remains unchanged from yesterday and 2.10%. Technicals remain positive for the rate markets although the long is still in a consolidation period digesting the recent deep declines in rates. Inflation still resisting the Fed's desire for some increase. Regardless of the minute to minute details and commentaries, the US and global economies are slowing, although slowing not by much in the US. Lack of inflation, trade wars, and tensions in the mid-east will support these low rates and slow the climb in stock indexes.

PRICES @ 10:00 AM

10 yr. note: 2.08% -2 bp

5 yr. note: 1.83% unch

2 Yr. note: 1.85% +1 bp

30 yr. bond: 2.58% -2 bp

Libor Rates: 1 mo. 2.394%; 3 mo. 2.410%; 6 mo. 2.318%; 1 yr. 2.305% (6/13/19)

30 yr. FNMA 3.5: @9:30 101.96 -6 bp (-7 bp from 9:30 yesterday)

15 yr. FNMA 3.5: @9:30 102.94 +4 bp (+1 bp from 9:30 yesterday)

30 yr. GNMA 3.5: @9:30 102.91 -8 bp (-5 bp from 9:30 yesterday)

Dollar/Yuan: $6.9239 +$0.0022

Dollar/Yen: 108.32 -0.06 yen

Dollar/Euro: $1.1245 -$0.0032

Dollar Index: 97.29 +0.28

Gold: $1354.80 +$11.10

Crude Oil: $52.33 +$0.05

DJIA: 26,013.06 -93.71

NASDAQ: 7783.95 -53.19

S&P 500: 2882.63 -9.01

About Richard Sardella

Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

About This Report And Disclosure Information

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

Posted in:General
Posted by Richard Sardella MLO.100007700/NMLS 233568 on June 14th, 2019 9:42 AM
Daily Market Analysis

The day started with the 10 yr down 2 bps from yesterday after dropping 2 bps yesterday; the stock indexes at 8:30 am ET a little better after minor losses yesterday on the indexes. By 9:30 am ET the 10 yr yield at 2.11% -1 bp from yesterday.

At 8:30 am ET weekly jobless claims were up 3K to 222K, about in line but as you know these days claims don’t carry much interest with so many jobs available out there.

Also at 8:30 May import and export prices; imports declined 0.3% as expected, export prices expected to have increased by 0.1% were down 0.2%. Yr/yr import prices -1.5% with forecasts of -1.3%; yr/yr export prices -0.7% on estimates of 0.0%. Non-petroleum imports offer a core reading for import prices, and the results are no better, at minus 0.3% on the month and minus 1.4% on the year. Prices of agricultural exports continue to struggle, down 1.0% in May (which follows a 1.5% fall in April) for an annual rate of minus 5.3%. The data for this data was the first week in May before the US increase of tariffs on $200B of Chinese imports. Import prices from China fell 0.1% in May with this reading in the next report for June certain to be a focus of attention.

No more data today; this afternoon Treasury will auction $16B of 30s re-opening the issue from May. Yesterday’s 10 yr auction was stronger than May when a new 10 yr note was auctioned.

Not a lot of direct news that impact the bond market today. The headline is the attacks on oil tankers In the Gulf of Oman; two oil tankers were attacked in the Gulf of Oman, leaving one ablaze and both adrift, shipping firms said, driving oil prices as much as 4% higher over worries about Middle East supplies. After crude prices have been crumbling over the last month the price today is higher but still low comparatively speaking. The attacks were the second in a month near the Strait of Hormuz, a major strategic waterway for world oil supplies. 30% of the world’s seaborne oil pass through the straits. No noticeable market reactions except on crude prices.

At 9:30 the DJIA opened +89 its first gain in three sessions, NASDAQ +34, S&P +10. 10 yr note 2.11% -1 bp.

Over the past few days, lenders swamped with references and direct originations from their retail branches pushed prices lower to slow down the increased pace of activity. Refinancing usually happens with lenders that are servicing loans originators previously originated clogging up the pipelines.

Looking ahead; tomorrow May retail sales will be a key report with the Fed poised to lower rates at the end of July at the next meeting after the FOMC meeting that begins next Tuesday and Wednesday; (the July meeting 30th and 31st).

We still see the rate markets in a consolidation mode but near term holding well. There has been little change for the 10 yr note for over a week now, and MBS prices in the actual MBS markets were maintained by lenders there would have been little movement in prices over the last eight sessions.

PRICES @ 10:00 AM

10 yr note: 2.11% -1 bp

5 yr note: 1.87% unch

2 Yr note: 1.87% -1 bp

30 yr bond: 2.61% -1 bp

Libor Rates: 1 mo 2.401%; 3 mo 2.427%; 6 mo 2.341%; 1 yr 2.333% (6/12/19)

30 yr FNMA 3.5: @9:30 102.03 +5 bp (+15 bps frm 9:30 yesterday)

15 yr FNMA 3.5: @9:30 102.95 +6 bp (+14 bps frm 9:30 yesterday)

30 yr GNMA 3.5: @9:30 102.95 +3 bp (+13 bps frm 9:30 yesterday)

Dollar/Yuan: $6.9225 +$0.0047

Dollar/Yen: 108.47 -0.04 yen

Dollar/Euro: $1.1276 -$0.0013

Dollar Index: 97.04 +0.04

Gold: $1339.20 +$2.40

Crude Oil: $52.94 +$1.80

DJIA: 26,085.80 +80.97

NASDAQ: 7839.90 +47.18

S&P 500: 2889.76 +9.92

About Richard Sardella

Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

About This Report And Disclosure Information

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

Posted in:General
Posted by Richard Sardella MLO.100007700/NMLS 233568 on June 13th, 2019 6:11 PM
Daily Market Analysis

Let’s start with the weekly MBA mortgage applications: a huge increase in apps last week as rate declines finally engaged. Apps increased 26.8% overall, purchase apps +10.0%, refinance apps increased 47.0%. Applications had been rather meek the last month but last week buyers and refinancers jumped in.

May CPI this morning: overall CPI up 0.1% as was expected, the core (less food and energy) a little better at +0.1% with forecasts of 0.2%. Overall CPI yr./yr. thought to be +1.9% was up 1.8%; core CPI yr./yr. +2.0% with forecasts of 2.1%. More evidence for the Fed that inflation isn’t increasing. The initial reaction to the better than expected data dropped the 10 yr. 2 bps to 2.12% and MBS prices +8 bps.

Trading in Federal Funds futures are signaling a 0.25% cut in the rate in the next two months; we don’t expect the Fed will move at the meeting next week, but the July meeting is in play and likely that is when the cut will occur. The cut is already being discounted in markets, both rate markets, and equity markets.

On the China trade war: news coming in from China indicating it and its business community are gearing up for a long trade dispute. Those optimistic views here in America led by non-other than Jamie Dimon at JP Morgan/Chase were wrong as it appears now. Businesses affected by the tariffs are making plans to move to places where they can continue to function. Has Trump pushed too hard? In May Xi exhorted his country to a second Long March, a reference of Mao’s strategy to preserve the communist revolution. What Xi didn’t say was that the new march -- this time in the service of China’s own model of capitalism -- is already underway. The next opportunity for meaningful trade talks will be at the G-20 meeting in a little over two weeks. Still uncertain though that a meeting between Trump and XI will occur. Over a trillion dollars has been wiped from global markets in the past month by the trade fight. Up to now, the consensus has been a prolonged trade war would be avoided; it may be time for analysts, big banks and Wall Street to re-think that view; the Fed appears to be doing just that.

At 9:30 the DJIA opened -9, NASDAQ -16, S&P unchanged. 10 yr. at 9:30 unchanged from yesterday at 2.14% after dropping to 2.12% briefly on the CPI report. MBS prices +3 bps from yesterday close and -5 bps from 9:30 yesterday.

This afternoon at 1:00 pm ET Treasury will auction $24B of 10s, re-opening the issue from May. Yesterday the 3 yr. auction got strong bids.

At 2:00 pm this afternoon Treasury will release the budget data for May, expecting a deficit of $198B.

PRICES @ 10:00 AM

10 yr. note: 2.13% -1 bp

5 yr. note: 1.89% -2 bp

2 Yr. note: 1.90% -1 bp

30 yr. bond: 2.62% unch

Libor Rates: 1 mo. 2.410%; 3 mo. 2.449%; 6 mo. 2.352%; 1 yr. 2.343% (6/11/19)

30 yr. FNMA 3.5: @9:30 101.88 +2 bp (-5 bp from 9:30 yesterday)

15 yr. FNMA 3.5: @9:30 102.81 +3 bp (-1 bp from 9:30 yesterday)

30 yr. GNMA 3.4: @9:30 102.83 +3 bp (+8 bp from 9:30 yesterday)

Dollar/Yuan: $6.9179 +$0.0065

Dollar/Yen: 108.47 -0.05 yen

Dollar/Euro: $1.1315 -$0.0013

Dollar Index: 96.77 +0.08

Gold: $1336.00 +$4.80

Crude Oil: $52.17 -$1.12

DJIA: 26,047.73 -0.78

NASDAQ: 7804.72 -17.85

S&P 500: 2884.25 -1.37

About Richard Sardella

Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

About This Report And Disclosure Information

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

Posted in:General
Posted by Richard Sardella MLO.100007700/NMLS 233568 on June 12th, 2019 9:57 AM

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