December 15th, 2021 8:47 AM by Richard Sardella MLO.100007700/NMLS 233568
At 8:30 am ET November retail sales were quite weak compared to consensus estimates; sales were thought to be +0.8% but increased just 0.3%, excluding vehicle sales the estimates were for an increase of 0.9%, as reported +0.3%. The weak sales may be due to the spike in prices recently as inflation is continuing to ramp up across the spectrum.
Also, at 8:30 am November import and export prices; both imports and exports matched the consensus views. Imports increased 0.7% m/m and +11.7% yr./yr.; exports +1.0% m/m and +18.2% yr./yr. So-called control group sales -- which are used to calculate GDP and exclude food services, auto dealers, building materials stores and gasoline stations -- fell 0.1% in November from a month earlier.
At 9:30 am the DJIA opened +11, NASDAQ unchanged, S&P +4. 10 yr. 1.46% +2 bps. FNMA 2.5 30 yr. coupon at 9:30 am -11 bps and -4 bps from 9:30 am yesterday. By 10 am the stock indexes after opening unchanged began to slide and with them the interest rate markets getting a little support. The pattern over the last few weeks is when the stock indexes slip the interest rate markets get support, crazy but that is the case.
At 10 am NAHB reported its Dec housing market index, expected at 84 from 83 in November, as released 84.
Nothing to do now but wait until the FOMC policy statement and Powell’s press conference. 99.9% of markets expect the Fed to ratchet up its previously announced tapering from 6 months to three months, taking the $120B a month buying of treasuries and MBSs down to zero. So far the faster tapering hasn’t had any noticeable impact in the rate markets. What isn’t clear yet is what the Fed sees going forward about inflation. What will the Fed do with its gargantuan balance sheet; St. Louis Fed President James Bullard commented recently on the prospect of allowing a balance sheet runoff at the end of taper, policy makers will have likely deliberated on the issue, and the remarks will determine how the longer end of the curve reacts to the meeting. Along with the meeting the Fed will release its quarterly forecasts going out 2 yrs.
Beside the Fed today, tomorrow and Friday the ECB, Bank of England and the Bank of Japan are all meeting.
PRICES @ 10:00 AM
10 yr. note: 1.44% unch
5 yr. note: 1.25% +2 bp
2 Yr. note: 0.67% +1 bp
30 yr. bond: 1.83% unch
Libor Rates: 1 mo. 0.107%; 3 mo. 0.211%; 6 mo. 0.291%; 1 yr. 0.498% (12/14/21)
30 yr. FNMA 3.0: @9:30 am 103.58 -6 bp (-1 bp from 9:30 am yesterday)
30 yr. FNMA 2.5: @9:30 am 102.02 -11 bp (-4 bp from 9:30 am yesterday)
30 yr. GNMA 2.5: @9:30 am 102.03 -9 bp (-5 bp from 9:30 am yesterday)
Dollar/Yuan: $6.3677 +$0.0002
Dollar/Yen: 113.81 +0.06 yen
Dollar/Euro: $1.1260 unch
Dollar Index: 96.57 unch
Gold: $1765.80 -$6.50
Bitcoin: 47,297 -257
Crude Oil: $69.87 -$0.86
DJIA: 35,460 -84
NASDAQ: 15,158 -80
S&P 500: 4622 -12
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.