CHM Blog

Prior to 8:30 am ET the 10 year note yield traded at 4.98% +2 bps. At 8:30 am a flood of information. Weekly jobless claims at 210K +10k from the prior week. The total number of continued weeks claimed for benefits in all programs for the week ending October 7 was 1,566,404 a decrease of 12,941 from the previous week. Q3 GDP expected to be strong with forecasts from +4.1% to 5.4%, reported +4.9%. Summer spending seen as the reason for the outlier and not to be taken as trend, the first six months growth averaged about 2.1%, the gain the largest since 2014. Not a market surprise. They were expecting the increase. Sept durable goods orders also strong, new orders expected +1.0% increased 4.7%, ex-transportation orders +0.5% on forecasts of +0.2%, core capital goods orders expected 0.0% increased 0.6%.

The ECB met today and held rates unchanged at 4.5%. Officials signaled that they might not need to raise rates further, repeating language first used at their last policy statement in September. Europe’s economy much weaker than the US, they are on the edge of recession. ECB President Christine Lagarde is expected to speak later this morning. That the ECB left rates unchanged was the catalyst for the 10 year note to back down from levels prior to 8:30 am.

The House has a speaker. Mike Johnson, LA Republican. Ready to tackle increased spending Biden is asking for and dealing with the upcoming government shutdown on Nov 17th. Johnson supports a short-term budget bill, known as a continuing resolution or CR, that funds the government at current levels to either Jan. 15 or April 15, said Chris Krueger of TD Cowen’s Washington Research Group.

At 9:30 am the DJIA opened -2, NASDAQ -47, S&P -10. 10 year note 4.93% -3 bps. FNMA 6.5 30 year coupon at 9:30 am +3 bps from yesterday’s close and -19 bps from 9:30 am yesterday; the 6.0 coupon +5 bps and -33 bp from 9:30 am yesterday.

At 10 am Sept pending home sales were expected to have declined 0.1% after falling 7.1% in August. Sales completed but not yet closed. Sales increased 1.1%.

At 1 pm Treasury will complete this week’s borrowing with $38B of 7 year notes. Yesterday’s 5 year auction was disappointing with weak demand.

Tomorrow the Fed’s favorite inflation gauge, PCE (personal consumption expenditures), Sept personal income and spending and the University of Michigan consumer sentiment index. Very key data. PCE month/month expected +0.35 from +0.4%, year/year +3.4% from +3.5%, core PCE month/month +0.3% from +01%, year/year 3.7% from 3.9%. Sept personal income expected +0.4%, spending +0.5%. University of Michigan consumer sentiment index expected at 63.0 unchanged from mid-month; sentiment has been falling recently.

PRICES @ 10:00 AM

10 year note: 4.91% -4 bp

5 year note: 4.84% -6 bp

2 year note: 5.06% -7 bp

30 year bond: 5.07% -2 bp

30 year FNMA 7.0 @9:30 am 100.79 -+5 bp (unch from 9:30 am yesterday)

30 year FNMA 6.5: @9:30 am 98.87 +3 bp (-19 bps from 9:30 am yesterday)

30 year FNMA 6.0 @9:30 am 96.70 +5 bp (-33 bps from 9:30 am yesterday)

30 year GNMA 6.0: @9:30 am 97.34 +5 bp (-18 bps from 9:30 am yesterday)

Dollar/Yuan: $7.3158 -$0.0014

Dollar/Yen: 150.17 -0.05 yen

Dollar/Euro: $1.0549 -$0.0018

Dollar Index: 106.62 +0.10

Gold: $1988.90 -$6.00

Bitcoin: 34,292 -374

Crude Oil: $83.59 -$1.80

DJIA: 32,952 -84

NASDAQ: 12,681 -140

S&P 500: 4259 -28

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.