CHM Blog

September consumer price index (CPI) was mostly in line with estimates, the deviation was in year/year core CPI that was thought to be 2.5% up from 2.4% in August, it increased 2.6%. Year/year overall CPI expected +3.7% up from 3.4% the last two months. Consumer prices rose sharply for shelter (0.4% versus 0.3% in August) and transportation services (0.6% versus 0.5%). Meanwhile, the CPI rebounded for medical care services (0.3% versus -0.2%). From the previous year, the core inflation rate was at 2.6%. Gasoline rose 34.2% year/year, more than 27.4% in August and fuel oil prices increased 74.2%, compared with 52% previously.

The reaction was swift, the 10 year yield increased 8 bps, MBS prices dropped 62 bps. No improvement in inflation resurrects the idea the Fed will increase rates, probably not at the October 29th FOMC meeting but the December FOMC is likely with inflation remaining elevated.

Weekly MBA mortgage applications this morning, down 2.7% last week. Applications to refinance a loan fell by 0.45% from the previous week, while purchase applications declined by 0.40%.

At 2 pm, the Fed’s Beige Book, details from the 12 Fed districts.

This week kicks off earnings week led by banks. Some banks that have reported were better while others are not meeting expectations.

Tomorrow September producer price index, year/year core PPI expected at 4.5% from 4.6%.

PRICES @ 10:00 AM

10 year note: 5.30% +8 bp

5 year note: 5.10% +10 bp

2 year note: 4.91% +11 bp

30 year bond: 5.61% +5 bp

30 year FNMA 6.5: @9:30 am 100.30 -55 bp (-48 bp from 9:30 am yesterday)

30 year FNMA 6.0: @9:30 am 97.87 -62 bp (-69 bp from 9:30 am yesterday)

30 year GNMA 6.5: @9:30 am 100.35 -47 bp (-39 bp from 9:30 am yesterday)

Dollar/Yen: 158.91 +0.60 yen

Dollar/Euro: $1.1125 -$0.0073

Dollar Index: 102.77 +0.59

Gold: $4,120 -$56

Bitcoin: 82,962 -247

Crude Oil: $95.31 +$1.17

DJIA: 51,710 +40

NASDAQ: 26,994 -211

S&P 500: 7761 -45

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.