August 25th, 2021 10:01 AM by Richard Sardella MLO.100007700/NMLS 233568
The 10 yr. note began the day at 1.30% +1 bp, MBS prices generally unchanged from yesterday. Yesterday the 10 and 30 increased 4 bps to close at technical resistance at 1.30%, MBS prices -16 bps and late in the session a few lenders re-priced lower. The US stock market trading in pre-opening trading unchanged from yesterday.
Weekly MBA mortgage applications last week increased; the composite index +1.6%, purchase applications +3.0% while re-finance apps +1.0%.
At 8:30 am ET July durable goods orders; new orders -0.1% but estimates were -0.2%. Excluding volatile transportation orders forecasts were +0.5%, orders increased 0.7%. Core capital goods orders were expected +0.5%, as reported 0.0%.
Yesterday the House narrowly passed a measure approving a $3.5 trillion budget blueprint and locking in a late September vote on a roughly $1 trillion infrastructure bill, ending a standoff between centrist Democrats and party leaders over their legislative agenda. The Senate passed the same budget blueprint earlier this month, and lawmakers are already working on drafting detailed legislation. The centrists did get concession on when the $1 trillion infrastructure bill that will now be voted on Sept 27th, before the $3.5 trillion infrastructure bill will be ready.
At 9:30 am the DJIA and the other two key indexes opened quietly. The DJIA opened -15, NASDQ +9, S&P +1. 10 yr. 1.30% +1 bp. FNMA 2.0 30 yr. coupon at 9:30 am unchanged from yesterday but 14 bps lower than 9:30 am yesterday. The 2.5 coupon -2 bps from yesterday and -11 bps from 9:30 am yesterday.
At 1 pm Treasury will auction $61B of 5 yr. notes. Yesterday the 2 yr. auction met with very strong demand and bidding.
The bellwether 10 yr. note is testing key near term technical levels at 1.30% this morning and yesterday. There isn’t much to do now until Friday; a weekly close above 1.30% will set in motion more selling and higher interest rates; the amount interest rates will increase if a weekly close above 1.30% depends on economic outlooks and what is increasingly being seen as inflation moving higher. The Fed still saying inflation increases now won’t last, but the supply chain that is one of the leaders in increased costs continues deteriorating and wage pressures are increasing.
The Jackson Hole symposium begins tomorrow but Powell isn’t scheduled to address the group until Friday morning. The financial world awaiting his comments about what he expects from the economy and when the Fed may begin reducing its $120B a month purchases of treasuries and MBSs, and when the Fed will begin selling its balance sheet of treasuries and MBSs.
PRICES @ 10 AM
10 yr. note: 1.31% +1 bp
5 yr. note: 0.80% +1 bp
2 Yr. note: 0.24% unch
30 yr. bond: 1.92% unch
Libor Rates: 1 mo. 0.088%; 3 mo. 0.121%; 6 mo. 0.158%; 1 yr. 0.236% (8/24/21)
30 yr. FNMA 2.0: @9:30 101.27 unch (-14 bp from 9:30 am yesterday)
30 yr. FNMA 2.5: @9:30 103.73 -2 bp (-11 bp from 9:30 am yesterday)
30 yr. GNMA 2.5: @9:30 103.33 +6 bp (-14 bp from 9:30 am yesterday)
Dollar/Yuan: $6.4780 +$0.0066
Dollar/Yen: 110.00 +0.31 yen
Dollar/Euro: $1.1738 -$0.0022
Dollar Index: 93.07 +0.18
Gold: $1791.40 -$18.10
Bitcoin: 47,813 -341
Crude Oil: $67.69 +$0.15
DJIA: 35,370 +4
NASDAQ: 15,041 +22
S&P 500: 4490 +4
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.