CHM Blog

At 8:30 am ET this morning weekly jobless claims at 248K with estimates at 243K and unchanged from a week ago. Claims at the highest since last October, the four-week moving average, which smooths out weekly fluctuations, rose by 5,000 to 240,250—its highest level since late August 2023. Continuing claims jumped by 54,000 to 1,956,000 in the week ending May 31, the highest since mid-November 2021 and well above the forecast of 1,910,000. The labor market is slowing although still strong based on historic comparison, 4.2% unemployment remains at that level.

Yesterday May CPI month/month overall CPI was expected +0.2% but increased 0.1% and down from +0.2% in April; year/year overall +2.4% against 2.5% forecasts but up from 2.3% in April. Core CPI month/month thought to be +0.3% increased 0.1% and down from 0.2% in April, year/year core estimates were +2.9%, reported at 2.8% unchanged from April. Based on that data inflation isn’t increasing.

This morning May wholesale prices (PPI) also supports a low inflation view. Month/month overall PPI expected at +0.2% reported at +0.1%, year/year overall estimates 2.6% reported at 2.6%. Core month/month PPI, less food and energy, thought to be +0.3% up just 0.1%, year/year core estimates at 3.1% hit at 3.0%. Prices for goods went up 0.2% while cost for services inched 0.1% higher. April core month/month was revised from -0.4% to -0.2%. Year/year core PPI and trade services at 2.7% down from 2.9% in April.

The opinions rotate over whether the Fed will lower rates at the FOMC September meeting, yesterday and today inflation readings showed inflation isn’t increasing, the May CPI and PPI imply inflation has yet to feel the brunt of the tariffs leading many this morning to look for a rate cut later this summer. Those on again, off again conjectures about rate cuts are as reliable as a 10 day weather forecast, the outlook changes with each key data release.

At 9:30 am ET the DJIA opened -155, NASDAQ -32, S&P -9. 10 year 4.37% -6 bps. FNMA 6.0 30 year coupon at 9:30 am +16 bps from yesterday, and +21 bps from 9:30 am yesterday.

At 1 pm Treasury will conclude this week’s borrowing with $22B 0f 30 year bonds; yesterdays 10 year note auction wasn’t a barn burner but did get decent demand.

The 10 trading under 4.40% is a critical level; already this morning the note yield has increased 3 bps from its low yield earlier this morning.

PRICES @ 10:00 AM

10 year note: 4.38% -5 bp (low 4.35%)

5 year note: 3.97% -5 bp

2 year note: 3.91% -4 bp

30 year bond: 4.87% -5 bp

30 year FNMA 6.0: @9:30 am 101.12 +16 bp (+21 bp from 9:30 am yesterday)

30 year FNMA 6.5: @9:30 am 102.84 +11 bp (+17 bp from 9:30 am yesterday)

30 year GNMA 6.0: @9:30 am 101.09 +4 bp (+13 bp from 9:30 am yesterday)

Dollar/Yen: 143.26 -1.34 yen

Dollar/Euro: $1.1599 +$0.0111

Dollar Index: 97.80 -0.83

Gold: $3,419.50 +$75.80

Bitcoin: 107,057 -1718

Crude Oil: $67.41 -$0.74

DJIA: 42,695 -171

NASDAQ: 19,592 -24

S&P 500: 6017 -5

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.