January 14th, 2020 9:16 AM by Richard Sardella MLO.100007700/NMLS 233568
There's not much movement (again) in the interest rate markets this morning with the 10 yr. note glued in a very narrow range and MBS markets in an even narrower range. CPI is the data today; at 8:30 am ET Dec CPI month-to-month better than estimates, both the overall and the core (ex-food and energy) were lower than thought. Overall CPI expected +0.3% increased 0.2%, the core expected +0.2% increased 0.1%. Both yr./yr. +2.3% as expected. The food index was up 0.2% m/m in December. The energy index was up 1.4% m/m in December. The shelter index rose 0.2% m/m and was a key driver of the modest uptick in core CPI. The key takeaway from the report is that it won't cause any immediate rethink of the Fed's policy position. The CPI data takes a backseat to the PCE price data as the Fed's preferred inflation gauge, and the latest report showed core-PCE inflation up just 1.6% yr./yr.
At 6:00 am ET, the Dec NFIB small business optimism index, not what is considered first-tier data but interesting. The expectations were for the index at 104.4 from 104.7 in Nov, the index dropped to 102.7, quite a decline for this index.
Today begins the Q4 earnings season with banks reporting. JPMorgan Chase & Co. posted the best year for any US bank in history. A rebound in trading, especially in fixed income, the company said profit jumped 21% in the fourth quarter. We will get the other banks through the day. CITI is out and also beat forecasts while Wells missed its estimates. The stock indexes before the open mostly unchanged changed from yesterday.
Tomorrow the US and China are scheduled to sign the Phase One trade deal. The US-China deal will lead to China buying more US products, but not tackle hard issues such as subsidies. President Trump's trade war with Beijing reduced the US's trade deficit with China last year, although Chinese manufacturers still export far more to the US than vice versa. Also, today the US, the European Union, and Japan proposed new global trade rules to curb subsidies they say are distorting the worldwide economy, with China their clear target. Subsidies provided to Chinese firms are a huge sticking point that President Trump could not get any traction with China.
The House will send the impeachment to the Senate on Thursday, according to reports this morning.
This evening Democrats will debate; six contenders with no clear front-runner and three weeks before the Iowa caucuses. The last face-to-face encounter among the candidates before Iowa. Dems will have four debates over the next five weeks.
Britain, France, and Germany took the first step toward reimposing international sanctions on Iran, seeking to pressure Tehran into returning to compliance with the 2015 pact that has limited the country's nuclear activities.
PRICES @ 10:00 AM
10 yr. note: 1.82% -3 bp
5 yr. note: 1.62% -3 bp
2 Yr. note: 1.57% -2 bp
30 yr. bond: 2.28% -2 bp
Libor Rates: 1 mo. 1.676%; 3 mo. 1.831%; 6 mo. 1.872%; 1 yr. 962% (1/13/20)
30 yr. FNMA 3.0: @9:30 101.67 +2 bp (+3 bp from 9:30 yesterday)
15 yr. FNMA 3.0: @9:30 102.72 +2 bp (+10 bp from 9:30 yesterday)
30 yr. GNMA 3.0: @9:30 102.58 -5 bp (-2 bp from 9:30 yesterday)
Dollar/Yuan: $6.9011 +$0.0074
Dollar/Yen: 109.97 +0.03 yen
Dollar/Euro: $1.1120 -$0.0013
Dollar Index: 97.48 +0.14
Gold: $1545.30 -$5.30
Crude Oil: $58.29 +$0.21
DJIA: 28,894.99 -12.06
NASDAQ: 9229.88 -44.05
S&P 500: 3279.79 -8.34
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.