CHM Blog

There has not been any key economic releases this week, just Treasury auctions of 3s and 10s that didn’t get much demand. This morning weekly jobless claims.

Weekly claims at 8:30 am ET expected at 220K increased 226K, 7K higher than the prior week. Continuing claims two weeks ago increased by 38,000 to 1,974,000 on the previous week, well above market expectations of 1,950,000 to mark the highest level of extended unemployment since November 2021. The results consolidated the view of a sharp slowdown in hiring and a softening labor market, although initial claims remain below the more elevated levels of early June. One more data point that adds to a rate cut at the FOMC meeting next month. After the slight bump higher in inflation, and a slight slowing in employment there isn’t any doubt now that the Fed will lower rates.

Also at 8:30 am, the preliminary Q2 productivity and unit labor costs productivity thought to be +1.9% increased 2.4% annually and compared to Q1s decline of -1.8%. Unit labor costs also better than forecasts of 2.1% reported at +1.6%. Output increased by 3.7% (versus -0.6% in Q1) and hours worked increased by 1.3% (versus 1.2%). Manufacturing sector's labor productivity advanced 2.1%, as output rose 2.3% and hours worked increased 0.3%. From the same quarter a year ago, nonfarm business sector labor productivity went up 1.3% in the second quarter.

At 9:30 am the DJIA opened +265, NASDAQ +161, S&P +33. 10 year note 4.23% unchanged. FNMA 6.0 30 year coupon at 9:30 am +1 bp from yesterday’s close and +8 bps from 9:30 am yesterday.

At 1 pm Treasury will auction $25B of 30 year bonds, yesterday’s 10 year and Tuesday’s 3 year auctions met with soft demand from foreign investors, likely to be the same for the 30 yr.

At 3 pm June consumer credit thought to be $+7.5B up from +$5.1B in May; usually not a market-mover.

In other news, The Bank of England cut its key interest rate to 4% from 4.25%, the fifth cut in a year, amid inflation and a cooling jobs market. The U.K.’s inflation rate rose to 3.6% in June, while unemployment increased to 4.7%. Inflation is expected to peak at 4% in September. A broad set of tariffs affecting nearly all US trading partners came into effect today.

PRICES @ 10:00 AM

10 year note: 4.23% unch

5 year note: 3.77% -1 bp

2 year note: 3.72% unch

30 year bond: 4.80% -2 bp

30 year FNMA 6.0: @9:30 am 101.94 +1 bp (+8 bp from 9:30 am yesterday)

30 year FNMA 6.5: @9:30 am 103.47 -2 bp (+7 bp from 9:30 am yesterday)

30 year GNMA 6.0: @9:30 am 101.78 +3 bp (+11 bp from 9:30 am yesterday)

Dollar/Yen: 147.23 -0.14 yen

Dollar/Euro: $1.1647 -$0.0013

Dollar Index: 98.21 +0.04

Gold: $3,460.70 +$27.30

Bitcoin: 116,621 +1338

Crude Oil: $64.69 +$0.34

DJIA: 44,365 +172

NASDAQ: 21,392 +222

S&P 500: 6388 +43

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.