August 8th, 2018 8:48 AM by Richard Sardella MLO.100007700/NMLS 233568
At 8:30 am EST the 10-yr note traded unchanged and MBS prices were also unchanged; stock indexes early this morning were slightly better, but by 8:30 the DJIA traded down 15 bps.
Weekly MBA mortgage applications continue to slip; down 3.0% last week after dropping 2.6% the prior week; purchase apps -2.0% after -3.0% the prior week; refinance apps -5.0% from -2.0% the week before. Apps are down 17% from a year ago. "Despite recent data indicating a strong U.S. economy and job market, including signs of wage growth, overall mortgage applications fell for the third straight week as housing continues to be hampered by the lack of homes for sale and crimped affordability," said Joel Kan, MBA vice president of economic and industry forecasting. Apps are now at a 2.5 yr low.
So far this week markets haven’t had economic data to think about; it starts tomorrow with PPI and Friday CPI.
Late yesterday June consumer credit, expected +$16B, was +$10B. Consumers held back from adding to their credit-card debt and even paid off some of it following a spending spree in the previous month. Revolving credit, which includes credit cards and which posted the biggest increase since November in the previous month, fell $0.2 billion in June. Non-revolving credit, which tracks both vehicle financing as well as student loans, rose a moderate $10.4 billion. The decline in revolving credit suggests the consumer regained the prudent spending habits characteristic of most the months in the first half of the year.
More tariffs in two weeks on China’s exports; 25% on an additional $16B of goods. It was widely expected. The new list covers products ranging from motorcycles to steam turbines and railway cars. China’s trade surplus with the U.S. stood at $28.1B, close to the record high in June, data released today showed. The U.S. Trade Representative’s Office said the total will increase, as it is considering a 10% on an additional $200B by early September. President Trump commented previously that he be might tax all of China’s exports to the US which totaled $500B last year. Despite this news, markets have been nonplussed by all of it...so far. The consensus among large money managers and market analysts remains optimistic that in the end all will be resolved peacefully. Hope springs eternal….
At 9:30 amthe DJIA opened -6, NASDAQ -5, S&P -2. The 10-yr remained unchanged at 2.98%.
The focus is in the bond market today with the $26B in 10-yr notes being auctioned at 1:00 pm. The 10 is finding support at 3.00% so far; the demand for new 10s will get a lot of focus. A weak auction may provide another test of 3.00%; breaching it on a close will open the idea to 3.11%, the high this year back in mid-May.
PRICES @ 10:00 AM
10 yr note: +3/32 (9 bp) 2.97% -1 bp
5 yr note: +2/32 (6 bp) 2.83% -1 bp
2 Yr note: unch 2.67% unch
30 yr bond: +5/32 (15 bp) 3.11% -1 bp
Libor Rates: 1 mo 2.071%; 3 mo 2.341%; 6 mo 2.522%; 1 yr 2.824%
30 yr FNMA 4.0 Aug: @9:30 101.56 +2 bp (-5 bp frm 9:30 yesterday)
15 yr FNMA 4.0: @9:30 102.33 +3 bp (-9 bp frm 9:30 yesterday)
30 yr GNMA 4.0: @9:30 102.22 unch (-5 bp frm 9:30 yesterday)
Dollar/Yuan: $6.8356 +$0.0033
Dollar/Yen: 110.98 -0.40
Dollar/Euro: +1.1591 -$0.0008
Dollar Index: 95.24 +0.05
Gold: $1218.40 +$0.10
Crude Oil: $67.74 -$1.44
DJIA: 25,590.29 -38.62
NASDAQ: 7873.26 -10.41
S&P 500: 2855.31 -3.14
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.
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.