CHM Blog

Bond markets continue to trade generally unchanged now for almost two months. The recent data on employment has been better than the Fed is believing, inflation while stubbornly higher than what the Fed wants isn’t increasing. Core consumer prices month/month +0.2%, unchanged from November, year/year +2.6% also unchanged. Yesterday weekly jobless claims were less than estimates confirming employment while not increasing isn’t worsening, continuing claims declined.

Now traders and markets wrestling with when, if, the Fed will cut rates. No cut in two weeks, that was a given, but with recent data on employment and inflation shows the current tide is changing with expectations of a March cut are fading.

Geopolitical issues in Iran and Venezuela are not filtering into US markets overall. The Iran situation is difficult for the President; there isn’t much the US can do. Unless there is a flare up in any of the global issues it won’t bother equities or interest rates. Focus will continue to be on US domestic conditions.

Once again, this morning the 10 year note banging up against the infamous 4.20% level that has held selling for the last six weeks.

At 9:15 am December industrial production and factory use. Production expected +0.1%, increased 0.4% the same as in November, capacity utilization a little better, expected 76.0%, increased to 76.3%.

At 9:30 am the DJIA opened +107, NASDAQ +108, S&P +20. 10 year note 4.19% +1 bp. FNMA 5.0 30 year coupon at 9:30 am -3 bps from yesterday’s close and -18 bp from 9:30 am yesterday.

At 10 am a few minutes ago, January NAHB hosing market index expected at 40 from 39 in December.

Monday is MLK, a federal holiday, all markets will be closed. No mail, most schools will be closed.

Absent fresh news on the geopolitical fronts today won’t see much movement in bonds.

PRICES @ 10:00 AM

10 year note: 4.19% +1 bp

5 year note: 3.79% +2 bp

2 year note: 3.58% unch

30 year bond: 4.81% +1 bp

30 year FNMA 5.0: @9:30 am 100.13 -3 bp (-18 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 101.38 -4 bp (-10 bp from 9:30 am yesterday)

30 year GNMA 5.0: @9:30 am 99.94 +4 bp (-18 bp from 9:30 am yesterday)

Dollar/Yen: 158.00 -0.63 yen

Dollar/Euro: $1.1618 +$0.0009

Dollar Index: 99.26 -0.07

Gold: $4.611.50 -$12.20

Bitcoin: 95,310 +115

Crude Oil: $59.76 +$0.57

DJIA: 49,376 -66

NASDAQ: 23,582 +51

S&P 500: 6948 +3

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.

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.