CHM Blog

The day began with a small improvement from yesterday. At 8:30 am ET the 10 -2 bps at 4.26% (yesterday 4.28% +3 bp). Rates continue to be tied in a very narrow range for the last two weeks, presently focusing on Thursday’s January PCE inflation data.

At 8:30 am January durable goods orders were weaker than forecasts. Markets were expecting -4.5%, month/month new orders reported -6.1%% from revised December orders -0.3%, excluding transportation orders expectations were +0.2%, reported -0.3%. Core capital goods were estimated at +0.1%, reported +0.1%, nondefense capital goods orders were down 19.4%. The weak orders show business spending declining.

At 9 am December Case/Shiller home price index of 20 cities, forecasts +0.2% and reported +0.2%; year/year forecasts +6.0% reported 6.1%.

At 9:30 am the DJIA opened -35, NASDAQ +42, S&P +4. 10 year at 9:30 am 4.29% +1 bp. FNMA 6.0 30 year coupon at 9:30 am -2 bps from yesterday’s close and -19 bps from 9:30 am yesterday.

At 10 am February consumer confidence from the Conference Board, expected at 115.0 from 114.8 in January, the index declined to 106.7. 21.2% of consumers said business conditions were "good," down slightly from 21.3% in January. 17.1% said business conditions were "bad," up from 15.3%. 41.3% of consumers said jobs were "plentiful," down from 42.7% in January. 13.5% of consumers said jobs were "hard to get," up from 11.0%. Six months out, 14.8% of consumers expect business conditions to improve, down from 16.7% in January. 15.5% expect business conditions to worsen, down from 16.0%. Consumers' assessment of their Family's Current Financial Situation was less positive in February. Consumers were a bit less optimistic about their Family's Financial Situation going forward. Consumers' Perceived Likelihood of a US Recession over the Next 12 Months ticked up in February.

At 1 pm Treasury will auction $42B of 7 year notes, about $20B less than its recent amounts. Yesterday the 2 and 5 year auctions met with muted demand, last week’s 20 year bond auction was essentially shunned, one of the worst demands in over a year. Recent treasury auctions have seen weaker demand and have had negative impact on rates.

The real focus this week remains the January inflation data on personal consumption expenditures (PCE). Month/month PCE expected +0.3% from +0.2%, year/year +2.4% from 2.6%; core PCE expected +0.4% from +0.2% while year/year at 2.8% from 2.9%. Monthly inflation increased but year/year declined. The present consensus (if there is such a thing as consensus when it comes to inflation) is the Fed will cut three times this year for a total of 75 bps, the first cut at the June FOMC meeting. 14.7% of consumers expect more jobs to be available, down from 15.6% in January. 17.3% anticipate fewer jobs, up from 16.7%.

PRICES @ 10:00 AM

10 year note: 3.53% -2 bp

5 year note: 3.65% -3 bp

2 year note: 4.09% -5 bp

30 year bond: 3.71% -3 bp

Libor Rates: 1 month 4.848%; 3 month 5.177%; 6 month 5.272%; 1 year 5.231% (3/30/23)

30 year FNMA 6.0: @9:30 am 101.73 -17 bp (-7 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 100.77 -6 bp (+8 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 100.91 -5 bp (+3 bp from 9:30 am yesterday)

Dollar/Yuan: $6.8692 -$0.0026

Dollar/Yen: 133.02 +0.30 yen

Dollar/Euro: $1.0893 -$0.0010

Dollar Index: 102.31 +0.16

Gold: $1997.60 -$0.-$0.30

Bitcoin: 28,397 +243

Crude Oil: $75.27 +$0.90

DJIA: 33,028 +169

NASDAQ: 12,078 +65

S&P 500: 4071 +20

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.