CHM Blog

Overnight the 10 year note dropped 7 bps to 4.22%, as the US sun was rising the 10 climbed back to 4.27% -2 bps. Continued volatility that describes the rate markets over the last three weeks. MBS prices began +4 bps from yesterday’s 13 bp decline.

The stock indexes in futures trading lower, the DJIA down 200 points. Hasn’t been a good week for the equity markets. Today is the expiration day for August stock index futures, $2.2 trillion of options setting the potential of more volatility. There are no economic releases today.

Worries over China’s economic slowdown and the crumbling real estate market adding pressure in the US, the stock indexes technically overbought and overdue for a correction that seems to have begun this week. Our economy continues to outperform most of the forecasts issued three months ago, job market strong, wages increasing, retail sales still showing consumers are spending. On the other side, consumers have run out of COVID money and using credit cards more with rates at or above 20% on some cards.

The 10 year note 10 calendar days ago at 3.96%, now 4.27%. Larger Treasury debt than expected, the Fed still in play and confirmed when the July FOMC minutes were released last Wednesday. Inflation slowing but still high according to the Fed’s 2.0% target, we do not expect 2.0% inflation for much longer than most are forecasting. The world is increasingly seeing debt levels as a major concern that will require higher rates to fund it. Treasury surprised markets last week saying it would have to borrow $1 trillion over the next few months.

At 9:30 am the DJIA opened -144, NASDAQ -123, S&P -27. 10 year at 9:30 am 4.27% -1 bp (low overnight 4.22%). FNMA 6.0 30 year coupon at 9:30 am +1 bp and -8 bps from 9:30 am yesterday.

Jackson Hole a week from now, Sept 1st two weeks away when the debt ceiling must be dealt with.

PRICES @ 10:00 AM

10 year note: 4.24% -4 bp

5 year note: 4.37% -4 bp

2 year note: 4.91% -2 bp

30 year bond: 4.38% -1 bp

30 year FNMA 6.0: @9:30 am 99.35 +1 bp (-7 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 97.63 -3 bp (-8 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 97.89 -8 bp (-3 bp from 9:30 am yesterday)

Dollar/Yuan: $7.2899 +$0.0085

Dollar/Yen: 145.37 -0.47 yen

Dollar/Euro: $1.0863 -$0.0009

Dollar Index: 103.52 -0.06

Gold: $1920.50 +$5.30

Bitcoin: 26,345 -1259

Crude Oil: $80.90 +$0.51

DJIA: 34,382 -92

NASDAQ: 13,185 -132

S&P 500: 4347 -23

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.