CHM Blog

Very early this morning (6 am ET) the 10 year note traded at 4.31% +5 bps from yesterday’s close. By 8 am at 4.28% +2 bps. The FOMC minutes didn’t provide any relief to the present view that the Fed might be finished with rate increases, the minutes suggested the opposite, that the Fed still has concerns that inflation isn’t slowing as much as the Fed and markets believed a couple of months ago. It is unlikely inflation will decline to the Fed’s 2.0% target for much longer than had been thought. Not to be forgotten, Treasury recently announced it will borrow $1 trillion to fund the growing federal debt, and Japan after holding rates steady said will allow interest rates to increase.

At 8:30 am weekly jobless claims, expected at 240K hit at 239K down 11K from the prior week; the 4-week average increased to 234.25K from 231.50K. Claims declined in 43 of the 53 states, continuing claims climbed by 32,000 to 1.72 million. Most laid-off workers appear to be finding new jobs relatively quickly. The jobless rate, at 3.6%, is near a 55-year bottom.

The August Philadelphia Fed manufacturing index increased from negative readings over the last six months to +12 from -13.5 in July.

At 9:30 am the DJIA opened +87, NASDAQ +52, S&P +16. 10 year at 9:30 am 4.28% +3 bps. FNMA 6.0 30 year coupon at 9:30 am -5 bps and -3 bps from 9:30 am yesterday.

At 10 am July leading economic indicators, thought to be -0.4%; reported at -0.4%; the 16th month in a row the indicator has been negative.

There are no more data points this week. Traders will spend the next few sessions thinking about the Jackson Hole Symposium beginning next Thursday. Last year J Powell made major news when he confirmed the Fed would continue to increase the FF rate to combat inflation, until he made the comment there was debate within markets that the Fed may not be so aggressive. Will he drop another tape bomb when he speaks? If so, which direction will rates move?

PRICES @ 10:00 AM

10 year note: 4.30% +4 bp

5 year note: 4.42% +2 bp

2 year note: 4.95% -1 bp

30 year bond: 4.41% +6 bp

30 year FNMA 6.0: @9:30 am 99.42 -5 bp (-3 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 97.71 -4 bp (-16 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 97.92 -3 bp (-14 bp from 9:30 am yesterday)

Dollar/Yuan: $7.2520 -$0.0454

Dollar/Yen: 145.79 -0.56 yen

Dollar/Euro: $1.0909 +$0.0029

Dollar Index: 103.11 -0.32

Gold: $1931.70 +$3.40

Bitcoin: 28,397 -536

Crude Oil: $80.55 +$1.17

DJIA: 34,856 +90

NASDAQ: 13,455 -19

S&P 500: 44010 +6

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.