May 10th, 2021 9:19 AM by Richard Sardella MLO.100007700/NMLS 233568
April employment data tanked last Friday; job growth hardly increased compared to all forecasts, the biggest miss ever between forecasts and what was released. The 10 yr. dropped from 1.58% to 1.49%, and MBS prices fell 23 bps before markets settled down. By the end of the day, the 10 yr. finished at 1.58%, MBS prices +8 bps. This morning in early activity, both the 10 yr. and MBS prices started unchanged from Friday’s close, but MBS prices improved by 9:00 am while the 10 yr. was unchanged.
There are no economic releases today or tomorrow. Tomorrow, the Treasury will begin its quarterly refunding with $58B of 3s. Wednesday and Thursday, $41B of new 10s, $27B of new 30s, respectively. On Thursday and Friday, April CPI and PPI; Friday, April retail sales.
The Senate is back; President Biden has laid out his $4 trillion plans for infrastructure and domestic plans, now the heavy lifting starts. Republicans are more than concerned about how to pay for it and how much is actually needed. Biden has admitted that he isn’t likely to get his plans passed without concessions. Biden will meet with the top two congressional Republicans, Mitch McConnell, and Kevin McCarthy, just as the GOP is ramping up opposition to his economic plan. The consensus now is that there may be a compromise on the infrastructure portion, but it will be a battle over the other elements Biden and Democrats are proposing.
There are increasing concerns in Washington that the lack of new workers is driven by too much government assistance that inhibits people from returning to work. Democrats are beginning to see that increased assistance for extended unemployment is becoming counter-productive to increasing employment.
At 9:30 am ET, the DJIA opened +167, NASDAQ -92, S&P +1. 10 yr. at 9:30 am unchanged at 1.57%. FNMA 2.5 30 yr. coupon +9 bp from Friday’s close and unchanged from 9:30 am Friday.
Inflation debates continue. All prices are increasing except wages, keeping the pot boiling whether and when wages will increase what increase can be expected. So far as commodity prices are setting records, traders are not reacting; food prices are increasing, gas increasing, but the bellwether 10 yr. has not moved for a month, ditto for mortgage rates.
PRICES @ 10:00 AM ET
10 yr. note: 1.58% unch
5 yr. note: 0.76% -1 bp
2 Yr. note: 0.15% unch
30 yr. bond: 2.28% unch
Libor Rates: 1 mo. 0.101%; 3 mo. 0.159%; 6 mo. 0.192%; 1 yr. 0.271% (5/7/21)
30 yr. FNMA 2.0: @9:30 101.36 +9 bp (-5 bp from 9:03 Friday)
30 yr. FNMA 2.5: @9:30 104.14 +9 bp (unch from 9:30 Friday)
30 yr. GNMA 2.5: @9:30 103.81 -3 bp (+10 bp from 9:30 Friday)
Dollar/Yuan: $6.4178 -$0.0147
Dollar/Yen: 108.80 +0.22 yen
Dollar/Euro: $1.2158 -$0.0005
Dollar Index: 90.18 -0.05
Gold: $1842.10 +$10.80
Bitcoin: 57,691 -291
Crude Oil: $64.78 -$0.12
DJIA: 35,002 +224
NASDAQ: 13,550 -201
S&P 500: 4230 -2
Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 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.