December 9th, 2021 9:17 AM by Richard Sardella MLO.100007700/NMLS 233568
10 yr. opened -3 bps at 1.48% and initial trades in MBSs +14 bps from yesterday. Stock indexes taking a breather after strong improvements this week with the S&P at all-time highs, DJIA -114, NASDAQ -61, S&P -15.
Weekly jobless claims at 8:30 am ET were lowest weekly filings going back to 1969, 184K -43K from the prior week. Prior to the pandemic claims at the lowest were averaging about 210K per week. Estimates were for claims at 223K. Recent data on jobs has been a mixed picture, November unemployment rate fell to 4.2% from 4.6% on October and better than 4.5% expected. Job growth was less than forecasts; NFP jobs increased 210K with estimates at 545K, private jobs were expected +525K but increased just 235K.
Omicron details continue to unfold, markets remain edgy. The news today, omicron is 4.2 times more transmissible in its early stage than delta, according to a study by a Japanese scientist. Concerns are swirling globally that omicron could deal the world a bigger blow than even delta, and the World Health Organization has cautioned that it could fuel surges with “severe consequences.” But a jump in cases in South Africa in the wake of the variant’s emergence hasn’t yet overwhelmed hospitals, leading to some optimism that it may only cause mostly mild illness. Pfizer Inc. and BioNTech SE also said this week that a booster dose of their vaccine could fortify protection against the strain. Pfizer now saying it will have efficacy of shots will be known by the end of the year.
Yesterday October JOLTS showed number of available positions rose to 11 million from an upwardly revised 10.6 million in September. The quits rate fell to 2.8% from a record 3% in the prior month, the first decline since May, suggesting employers are having some more success retaining workers. The BLS data show that there were 7.4 million unemployed Americans in October, the divergence between job openings and unemployed is unusual and suggests many potential workers are choosing not to work. The number of people quitting fell in transportation and warehousing, finance, and entertainment. Employment data has been somewhat confusing for markets; JOLTS data is old, its October news; the BLS November data last Friday
At 9:30 am the DJIA opened -132, NASDAQ -55, S&P -15. 10 yr. at 9:30 1.49% -3 bp. 2.5 30 yr. FNMA coupon at 9:30 am +6 bps and +3 bp from 9:30 am yesterday.
At 1 pm Treasury will auction $22B of 30 yr. bonds; the 10 yr. yesterday and Tuesday’s 3 yr. saw decent demand, about at the averages of the details over the last year.
Last night the 10 increased to 1.53% about 9 pm; this morning back to 1.49% 2 bps lower than at 4 pm yesterday. FOMC meeting next week will keep interest rates in a tight range; speedier tapering than what the Fed said at its last FOMC meeting with more and more analysts now expecting as many as 3 0.25% increases next year , the first coming in June 2022. Inflation finally sinking in deep within the Fed and other key central banks. Wages are increasing quickly, retail prices increasing at historical levels, inflation at 5+% the highest since the late 70s.
PRICES @ 10:00 AM ET
10 yr. note: 1.16% -3 bp
5 yr. note: 0.65% -5 bp
2 Yr. note: 0.35% -3 bp
30 yr. bond: 1.80% -2 bp
Libor Rates: 1 mo. 0.085%; 3 mo. 0.134%; 6 mo. 0.151%; 1 yr. 0.241% (7/19/21)
30 yr. FNMA 2.0: @9:30 102.08 +27 bp (+30 bp from 9:30 am ET yesterday)
30 yr. FNMA 2.5: @9:30 104.05 +19 bp (+25 bp from 9:30 am ET yesterday)
30 yr. GNMA 2.5: @9:30 103.48 -14 bp (-7 bp from 9:30 am ET yesterday)
Dollar/Yuan: $6.4835 -$0.0070
Dollar/Yen: 109.56 +0.10 yen
Dollar/Euro: $1.1770 -$0.0030
Dollar Index: 93.12 +0.23
Gold: $1824.90 +$15.70
Bitcoin: 29,544 -1,144
Crude Oil: $66.04 -$0.38
DJIA: 34,453 +462
NASDAQ: 14,322 +47
S&P 500: 4297 +39
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.