CHM Blog

Yesterday the 10 year note yield declined 3 bps, this morning at 9 am ET up 3 bps. MBSs yesterday increased 31 bps, at 9 am this morning -19 bps.

Markets continue to digest what J Powell said last Friday at Jackson hole; he didn’t relent or make it clear what the Fed may or may not do at the November FOMC but for the Sept meeting implied there won’t be another increase. It is about the incoming data between now and the end of the year whether the Fed is finished for the present. Powell and other Fed officials are leaning on the idea that the economy hasn’t had sufficient time to work through the rate increases, suggesting inflation will work lower as the impact of the increases make their way through the economy. Inflation has fallen sharply, in June 2022 the CPI inflation was 9.1% by July this year core CPI at 4.7%, caused by the pandemic and the massive money drop from the government ($1.9 trillion) in checks to everyone. The Fed hasn’t been able to increase unemployment as it wants to do, at 3.5% employment has historically been considered full employment. Summing it up, nothing new with the Fed.

At 9 am June Case/Siller home price index, expected +1.1% increased 0.9%, year/year thought to be -1.1% reported -1.2%.

At 9:30 am the DJIA opened -3, NASDAQ -19, S&P -1. 10 year 4.23% +3 bps. FNMA 6.0 30 year coupon at 9:30 am -12 bps from yesterday’s close and -1 bp from 9:30 am yesterday.

At 10 am two very key data points. July JOLTS job openings wasn’t good for rates, job openings are declining adding to the view the Fed is still facing a problem as employment remains strong, openings were expected at 9.559 mil, openings declined to 8.827 mil and June openings originally reported at 9.582 mil to 9.165 mil. Also at 10 am August consumer confidence index, estimates 116.5 from revised 114.0 in June from 117.0. Like the U. of Michigan’s consumer sentiment index last week the confidence index plunged to 106.1.

At 1 pm $36B 7 year note auction.

At 9:30 am MBS prices -12 bps, at 10:15 am +25 bps.

PRICES @ 10:00 AM

10 year note: @10:15 4.15% -5 bps

5 year note: @10:15 4.28% -10 bp

2 year note: @10:15 4.93% -8 bp

30 year bond: @10:15 4.23% -5 bp

30 year FNMA 6.0: @9:30 am 99.70 -12 bp (-1 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 98.03 -18 bp (-4 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 98.34 -9 bp (+7 bp from 9:30 am yesterday)

Dollar/Yuan: $7.2947 +$0.0042

Dollar/Yen: 147.17 +0.63 yen

Dollar/Euro: $1.0804 -$0.0017

Dollar Index: 104.30 +0.24

Gold: $1946.10 -$0.70

Bitcoin: 26,050 +80

Crude Oil: $80.04 -$0.06

DJIA: @10:15 34,703 +142

NASDAQ: @10:15 13,838 +133

S&P 500: @10:15 4463 +29

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

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