December 10th, 2020 12:04 PM by Richard Sardella MLO.100007700/NMLS 233568
Weekly jobless claims at 8:30 am ET were higher than forecasts, 853K against 724K expected, +137K; the 4 wk average 776K up from 739.5K the prior week. Before the release, the 10 yr. note was 0.94% unchanged, and the immediate reaction was 0.93% -1 bp. On an unadjusted basis, the figure increased by almost 229,000. The prior week included Thanksgiving, and data tend to be volatile around holidays.
Nov CPI also at 8:30 am ET, expected +0.1% increased 0.2%, yr./yr. 1.2% on 1.1% forecasts. The core, ex-food and energy, expected +0.2% was 0.2%, yr./yr. core +1.6% as forecast. Inflation notched up although we consider it market noise rather than a begging of a trend to higher prices and inflation.
The ECB meeting resulted in more stimulus to lift the currency out of a double-dip recession and provide support to the economy while its 350 million people wait for coronavirus vaccines to be deployed. The ECB expanded its debt purchase program and agreed to provide banks with even more ultra-cheap liquidity as long as they keep passing the cash onto companies. The central bank increased the overall size of its Pandemic Emergency Purchase Program by 500 billion euros to 1.85 trillion euros, in line with market expectations. It also extended the plan by 9 months to March 2022, intending to keep government and corporate borrowing costs at record lows. Markets awaiting Christine Lagarde’ s press conference.
Stimulus talks continue with no resolution to the differences between Republicans and Democrats. Tomorrow the debt ceiling has to be dealt with, and it will. Yesterday the House voted to pass a short-term extension until next week; today, the Senate will do likewise. The move gives Congress seven more days to enact a broader, $1.4 trillion “omnibus” spending measure for all government agencies from the Pentagon to national parks. The idea is to provide more time for a stimulus that has not budged for months, a lot of news and quotes from politicians, but at the end of the day neither party appears to see a stimulus as important as do most Americans suffering under the financial stress and losing jobs as well as businesses that will never return. The “plan” is to attach a stimulus bill to the budget resolution: the roadblocks, liability protection for businesses, and money to states to cover budget shortfalls.
On the FDA, a potential approval of the Pfizer vaccine likely at the end of the day; today FDA and other experts will meet all day before what is assumed as approval. The UK and Canada already approved it and are administering it to essential workers.
CoreLogic reporting on 3rd Q Equity Report, an overview of equity distribution across all US single-family residential properties with a mortgage. The number of mortgages in negative equity fell by 18.3% year over year in Q3 2020. The average equity gain of $17,000 per homeowner in Q3 2020 was the highest in over six years.
At 9:30 am ET, the DJIA opened -120, NASDAQ -81, S&P -16. 10 yr. at 9:30 am 0.92% -2 bps. FNMA 2.0 30 yr. coupon at 9:30 am unchanged from yesterday and unchanged from 9:30 am yesterday.
At 1:00 pm ET, Treasury will auction $24B of 30 yr. bonds.
At 2:00 pm ET, the Treasury budget for Nov; expected at -$200B after -$284.1B in October taking the 2021 fiscal deficit over two months -$484B.
There isn’t any change in interest rates recently. In the last six sessions, MBS prices day-today have been flat.
PRICES @ 10:00 AM ET
10 yr. note: 0.92% -2 bp
5 yr. note: 0.39% -1 bp
2 Yr. note: 0.15% unch
30 yr. bond: 1.67% -2 bp
Libor Rates: 1 mo. 0.147%; 3 mo. 0.220%; 6 mo. 0.250%; 1 yr. 0.335% (12/9/20)
30 yr. FNMA 2.0: @9:30 103.59 unch (unch from 9:30 yesterday)
30 yr. FNMA 2.5: @9:30 104.95 unch (+1 bp from 9:30 yesterday)
30 yr. GNMA 2.5: @9:30 104.53 -39 bp (-48 bp from 9:30 yesterday)
Dollar/Yuan: $6.5450 +$0.0017
Dollar/Yen: 104.30 +0.06 yen
Dollar/Euro: $1.2138 +$0.0054
Dollar Index: 90.91 -0.18
Gold: $1851.10 +$12.60
Crude Oil: $46.71 +$1.19
DJIA: 30,049 -20
NASDAQ: 12,363 +25
S&P 500: 3672 unch
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.