CHM Blog

Good news to begin today, this morning at 8:30 am ET down 5 bps to 4.28%.(by 10 am -10 bp). Nothing special about the pullback, mainly overbought after the huge increases over the last three weeks and squaring going into Jackson Hole that kicks off tomorrow with Powell speaking Friday morning.

Weekly mortgage applications released this morning down for the fifth week in a row and the weakest in 28 years. The composite index down 4.2% in the week ending August 18, compared with a 0.8% decrease in the previous week. Looking at the details, applications for purchases dropped 5%, adding more to the decline than the 2.8% fall in refinancing applications.

At 9:30 am the DJIA opened +72, NASDAQ +47, S&P +16. 10 year 4.25% -8 bps. FNMA 6.0 30 year coupon at 9:30 am +45 bps from yesterday’s close and +51 bps from 9:30 am yesterday.

At 9:45 am the August FLASH (preliminary) manufacturing and service sector indexes; the composite at 50.4, manufacturing 47.0 with forecasts at 48.8, service sector index 51.0 with forecasts at 52.0.

At 10 am July new home sales, expected at 705K from 697K in June, sales reported at 714K; details this afternoon.

At 11:30 am Treasury will auction $24B of 2 year FRNs. An FRN (floating rate note) is a security that has an interest payment that can change over time. As interest rates rise, the security's interest payments will increase. Similarly, as interest rates fall, the security's interest payments will decrease. Yields on 2-year Treasury FRNs are reset each week to reflect the most recent weekly 3-month (13-week) Treasury bill auction high discount rate.

At 1 pm Treasury will auction $16B of 20 year bonds, demand important, traders will focus on it as an indicator of inflation outlooks. Usually, the 20 year doesn’t generate much attention.

Today profit taking and position squaring ahead of Powell’s comments on Friday sending rates lower. The 10 4.22% -11 bps and MBS prices +55 bps taking rates and prices back to last Friday's level. Volatility continues.

PRICES @ 10:00 AM

10 year note: 4.23% -10 bp

5 year note: 4.37% -12 bp

2 year note: 4.95% -11 bp

30 year bond: 4.33% -7 bp

30 year FNMA 6.0: @9:30 am 99.54 +45 bp (+51 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 97.72 +34 bp (+42 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 98.05 +31 bp (+51 bp from 9:30 am yesterday)

Dollar/Yuan: $7.2813 -$0.0123

Dollar/Yen: 144.85 -1.03 yen

Dollar/Euro: $1.0837 -$0.0009

Dollar Index: 103.63 +0.06

Gold: $1947.50 +$21.50

Bitcoin: 25,946 +101

Crude Oil: $77.88 -$1.76

DJIA: 34,400 +111

NASDAQ: 13,627 +121

S&P 500: 4413 +26

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.