CHM Blog

Overnight the 10 year note yield dipped briefly to 4.18% -4 bps, by 8:30 am ET the yield was back to unchanged at 4.22%. The focus today, the FOMC minutes from the July meeting, released at 2 pm this afternoon.

July housing starts were expected at 1.455 mil apps reported at 1.452 million and June starts revived from 1.434 million to 1.398 million. Building permits were thought to be at 1.464 million, reported at 1.442 million with June permits revised from 1.440 million to 1.441 million. Overall starts and permits in line with estimates.

July industrial production expected +0.3% increased 1.0% but June revised from -0.5% to -0.8%, manufacturing increased 0.5% against forecasts of being unchanged, June revised from -0.3% to -0.5%. Capacity utilization was 79.3% with forecasts of 79.1%, but as with production June was revised lower, from 78.9% to 78.6%.

The FOMC minutes usually find nuggets for conjecture, since the meeting a lot of inflation data has been reported, CPI inflation increased from June, PPI fractionally lower. Rating agencies warning the Treasury debt has ballooned to levels that may put them in a position to downgrade banks, even JPMorgan/Chase in the cross hairs of Fitch Ratings. Investors currently do not expect another rate increase this year, though the implied odds of a hike at the October 31st-November 1st meeting are higher than those for their next meeting on September 19th-20th. Since the meeting Fed officials have sent conflicting ideas (nothing new about that, it is what is always the case); Philadelphia Fed President Patrick Harker, has indicated the central bank might not need to keep raising interest rates, others, including Fed Governor Michelle Bowman, have taken the opposite view. Next week the Jackson Hole global symposium, what Powell has to say may set the true tone. Whether or not the Fed stops increasing rates, it is a very long way before any rate cuts will occur.

At 9:30 am the DJIA opened -27, NASDAQ -43, S&P -4. 10 year at 9:30 am 4.23% +1 bp. FNMA 6.0 30 year coupon at 9:30 am -8 bps from yesterday’s close and -8 bps from 9:30 am yesterday.

PRICES @ 10:00 AM

10 year note: 4.22% unch

5 year note: 4.36% -2 bp

2 year note: 4.94% -2 bp

30 year bond: 4.34% +2 bp

30 year FNMA 6.0: @9:30 am 99.45 -8 bp (-8 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 97.88 -3 bp (-6 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 98.06 -5 bp (-5 bp from 9:30 am yesterday)

Dollar/Yuan: $7.2959 +$0.0133

Dollar/Yen: 145.73 +0.16 yen

Dollar/Euro: $1.0917 +$0.0009

Dollar Index: 103.13 -0.08

Gold: $1934.90 -$0.30

Bitcoin: 29,082 -97

Crude Oil: $81.10 +$0.11

DJIA: 35,089 +143

NASDAQ: 13,610 -21

S&P 500: 4443 +6

SOFR Data 08/016: 30-DAY AVERAGE(%): 5.23001, 90-DAY AVERAGE(%): 5.14339, 180-DAY AVERAGE(%): 4.99205, INDEX: 1.09261916

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.