CHM Blog

Prior to 8:30 am ET this morning the 10 year note yield at 4.16% +5 bps and FNMA 6.5 30 year coupon down 18 bps from yesterday’s closes.

Weekly jobless claims at 8:30 am expected at 222K, increased 220K +1K from the prior week. The 4-week average at 220.75K up from 220.25K, the highest since Dec 11, 2021. Continuing claims for the week ending 11/25, 1,861,000, a decrease of 64,000 from the previous week's revised level. Market reaction pushed the 10 year note yield down from 4.16% to 4.14% and MBS prices from -18 bps to -5 bps. Employment a key factor in what markets believe is the Fed’s outlook, higher is better when prophesying what the Fed will do next year.

Yesterday ADP reported private jobs increased just 103K, less than had been thought at 128K; (tomorrow’s employment report is expecting private jobs +150K) The long end of the curve improved to the lowest level since September but at the short end the 2 year note yield increased 5 bps (the 10 year -6 bps). Tomorrow the BLS November employment report that is thought to show job gains at +180K when government jobs are included. Taken together with Tuesday’s decline in job openings, reports from some big employers and today’s claims, the job market is slowing. No large firings but slowing hiring is assisting rates and Fed outlooks for rate cuts in 2024. Presently the consensus is four 25 bp rate cuts next year although there are some expecting even more than that.

The Fed won’t achieve its 2.0% inflation target easily or quickly, there are a couple of voices at the Fed beginning to ease off the stated target until at least the second half of next year at the earliest. Powell remains staunch in his drive to 2.0%, not wanting his legacy to be impaired by relaxing too early.

At 9:30 am the DJIA opened +86, NASDAQ +108, S&P +25. 10 year note at 9:30 am 4.13% +2 bps. Even with the 10 +5 bps to 4.13% MBS prices at 9:30 am were unchanged from yesterday’s close and +6 bps from 9:30 am yesterday. The price for the 10 year note -25 bps from the close yesterday and -19 bps from 9:30 am yesterday. The price for 6.5 FNMA +1 bps from yesterday’s close and +18 bps from 9:30 am yesterday.

At 3 pm October consumer credit will be released, the important component in the data is the revolving credit change, the use of credit cards by consumers.

PRICES @ 10:00 AM

10 year note: 4.14% +3 bp

5 year note: 4.13% +2 bp

2 year note: 4.59% unch

30 year bond: 4.26% +5 bp

30 year FNMA 7.0: @9:30 am 102.89 +1 bp (+9 bp from 9:30 am yesterday)

30 year FNMA 6.5: @9:30 am 101.96 +1 bp (+6 bp from 9:30 am yesterday)

30 year FNMA 6.0: @9:30 am 100.87 -1 bp (+3 bp from 9:30 am yesterday)

30 year GNMA 6.0: @9:30 am 101.22 +1 bp (+8 bp from 9:30 am yesterday)

Dollar/Yuan: $7.1347 -$0.0109

Dollar/Yen: 144.64 -2.66 yen

Dollar/Euro: $1.0769 +$0.0004

Dollar Index: 103.81 -0.35

Gold: $2044.60 -$3.30

Bitcoin: 43,496 -313

Crude Oil: $70.03 +$0.65

DJIA: 36,047 -7

NASDAQ: 14,239 +92

S&P 500: 4567 +18

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.