CHM Blog

Yesterday the 10 year note yesterday dropped 10 bps, at 9 am ET this morning the 10 year note yield at 3.83% +3 bps. MBSs yesterday +23 bps, at 9 am today down 6 bps.

Weekly jobless claims expected at 210K increased to 218K up 12K from the prior week. Claims are the lowest since the end of October. The 4-week average remained unchanged at 212K, continuing claims 1.88 million the prior week. Can’t make much of it, claims the last two weeks of the year can be distorted. The labor market still strong, defying the Fed that wants employment to increase as evidence of economic slowing. Equity markets continue to improve with increasing numbers of pundits ratcheting up the 2024 outlook; one analyst yesterday calling for the S&P 500 index to climb to 5400 next year (presently struggling to make a new high now, trading at 4780).

The November US trade deficit expected at -$89.6B increased to -$90.3B; imports down 2.1% while exports fell 3.6%. Slow growth globally likely will keep the trade deficit weaker into Q1 next year. The deficit the highest since July. Not a data point that will impact interest rates though.

At 9:30 am the DJIA opened +38, NASDAQ +47, S&P +8. 10 year note at 9:30 am +3 bps to 3.83%. FNMA 6.0 30 year coupon +1 bp from yesterday’s close and +13 bps from 9:30 am yesterday. Impressive MBSs are continuing to improve with treasuries weaker. BUT by 9:45 am the 6.0 coupon traded -9 bps.

The last of the data today, November pending home sales, contracts signed but so far not closed, expected +0.8% after declining 1.5% in October. Sales 0.0%.

At 1 pm Treasury will complete this week’s borrowing with $40B of 7 year notes. Yesterday the 5 year auction was well bid as was the 2 year note on Tuesday.

The Israeli war continues; Iranian-backed militants and Israeli forces traded fire across Israel’s northern border while Israeli leaders warned that time was running out for diplomatic efforts to defuse tensions in that area, heightening fears that the war in Gaza could spill into a broader regional conflict including Lebanon and Syria. “The stopwatch for a diplomatic solution is running out,” said Benny Gantz, a senior member of the Israeli war cabinet, on Wednesday. “If the world and the Lebanese government don’t act in order to prevent the firing on Israel’s northern residents, and to distance Hezbollah from the border, the Israeli military will do it.”

PRICES @ 10:00 AM

10 year note: 3.84% +4 bp

5 year note: 3.83% +4 bp

2 year note: 4.28% +4 bp

30 year bond: 3.98% +2 bp

30 year FNMA 6.0: @9:45 101.69-9 bp (+2 bp from 9:30 am yesterday)

30 year FNMA 6.5: @9:45 102.55 -5 bp (-13 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:45 100.62 -21 bp (-6 bp from 9:30 am yesterday)

Dollar/Yuan: $7.1093 -$0.0322

Dollar/Yen: 140.83 -1.00 yen

Dollar/Euro: $1.1098 -$0.0009

Dollar Index: 100.98 unch

Gold: $2,084.50 -$8.50

Bitcoin: 42,553 -791

Crude Oil: $73.27 -$0.84

DJIA: 37,705 +48

NASDAQ: 15,119 +20

S&P 500: 4787 +6

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.