CHM Blog

The September NY Empire State manufacturing index expected down 10.0 increased to +1.9%, the first positive reading in months.

August import prices expected +0.3% increased 0.5% and up from +0.1% in August the largest month/month jump in 15 months; year/year though prices improved from July’s -4.6% to -3.0%. If fuel is set aside, import prices fell 0.1% last month. Export prices thought to be +0.4% increased 1.3%, year/year increased from -8.0% to -5.5%.

Bloomberg reported Detroit auto workers started their strike after talks between union leaders and the Big Three automakers fell through at the midnight deadline. Workers began walking out of Ford Motor’s Michigan plant that makes the Bronco SUV, a General Motors facility in Missouri and a plant in Ohio that makes the Jeep Wrangler. It was the first time in history the UAW acted against all three carmakers simultaneously.

Yesterday the ECB increased rates once again, the takeaway though is the ECB may not increase rates at its next meeting following the Fed holding rates unchanged next week at the FOMC meeting. The euro currency headed for its ninth week of declines, the longest decline since the euro was created 20 years ago.

The two inflation releases this week, CPI on Wednesday showed year/year core inflation dipped from 4.7% to 4.3%, PPI core yesterday year/year at 2.2% was down from 2.4% in July. Overall PPI year/year increased from 0.8% in July to +1.6%, the increase due to the rapid increase in energy prices. (Crude oil the past three months has increased from $68.00 to $90.00 this morning) The Fed’s target of 2.0% inflation is nowhere in sight, inflation will stay higher for a lot longer than had been expected, no longer seen in the near term as was the thought a few months ago. Traders are still betting the Fed will begin cutting rates next year by as much as 100 bps. The only way that may happen is if the economy weakens, presently that outlook isn’t getting any near-term traction.

At 9:15 am August industrial production estimated at +0.1% increased 0.4%. Manufacturing output increased 0.1% following a downwardly revised 0.4% increase (from 0.5%) in July. Motor vehicle assemblies declined 8.8% to a seasonally adjusted annual rate of 10.74 million units from 11.77 million in July. Factory usage thought to be 79.3% increased to 79.7%.

At 9:30 am the DJIA opened -57 after increasing 332 yesterday, the NASDAQ opened -38, S&P -16. 10 year note at 9:30 am 4.32% +2 bps. FNMA 6.0 30 year coupon at 9:30 am -9 bps from yesterday’s close and -26 bps from 9:30 am yesterday.

At 10 am the mid-month U. of Michigan consumer sentiment index expected at 69.2 from 69.5, the headline index reported at 67.7.

PRICES @ 10:00 AM

10 year note: 4.34% +4 bp

5 year note: 4.46% +4 bp

2 year note: 5.05% +4 bp

30 year bond: 4.42% +3 bp

30 year FNMA 6.0: @9:30 am 99.81 -9 bp (-26 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 98.22 -9 bp (-32 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 98.68 -9 bp (-30 bp from 9:30 am yesterday)

Dollar/Yuan: $7.2759 -$0.0009

Dollar/Yen: 147.89 +0.41 yen

Dollar/Euro: $1.0661 +$0.0019

Dollar Index: 105.27 -0.13

Gold: $1947.70 +$14.90

Bitcoin: 26,441 -111

Crude Oil: $89.69 -$0.47

DJIA: 34,869 -38

NASDAQ: 13,807 -119

S&P 500: 4485 -21

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.