February 9th, 2023 9:10 AM by Richard Sardella MLO.100007700/NMLS 233568
10-year note began today down 5 bps to 3.58%. MBS prices +8 bps at 9 am ET. Weekly jobless claims, the only data today, expected +92K reported at 196K, +13K from the prior week. The U.S. added 1.1 million jobs over the past three months, often overlooked sectors of the economy. Restaurants, hospitals, nursing homes and child-care centers are finally staffing up. Meanwhile big tech has cut about 100K jobs, Disney just announced 7K cuts. No wonder the Fed and economists are wringing their hands, data shows 1.1 million new jobs in the face of announced job cuts from big companies like Amazon. The service sector accounts for 63% of all private jobs while tech and information sectors account for just 2% of all private jobs. Last week Jan job growth was three times stronger than forecasts +517K leading Goldman Sachs economists reduced their odds that the U.S. will enter a recession in the next 12 months to 25%, from 35%, citing the strength of the labor market. The Fed wants employment lower in its drive to cool inflation.
At 9:30 am the DJIA opened +256, NASDAQ +144, S&P +35. 10 year note at 9:30 am 3.58% -4 bps. MBS prices at 9:30 am not following the lower 10 year note yield, FNMA 5.5 30 year coupon at 9:30 am -8 bps from yesterday’s close and +2 bps from 9:30 am yesterday.
This afternoon Treasury will sell $21B of 30 year bonds, yesterday’s 10 year note auction was phenomenal with huge demand.
Yesterday the 10 year note yield increased to 3.68% before backing down to close at 3.62%; 3.68% is a key chart support with a down trend line going back to last October. The heat is at the short end, the 2-year yield exceeded the 10-year yield by the widest margin since the early 1980s on Thursday, surpassing its December 2022 extremes.
PRICES @ 10:00 AM
10 yr note: 3.60% -2 bp
5 yr note: 3.80% unch
2 Yr note: 4.46% +3 bp
30 yr bond: 3.65% -3 bp
Libor Rates: 1 mo 4.575%; 3 mo 4.859%; 6 mo 5.151%; 1 yr 5.468% (2/8/23)
30 yr FNMA 6.0: @9:30 am 102.09 -14 bp (-14 bp from 9:30 am yesterday)
30 yr FNMA 5.5: @9:30 am 100.97 -8 bp (+2 bp from 9:30 am yesterday)
30 yr GNMA 5.5: @9:30 am 101.05 -9 bp (-4 bp from 9:30 am yesterday)
Dollar/Yuan: $6.7738 -$0.0154
Dollar/Yen: 130.69 -0.75 yen
Dollar/Euro: $1.0778 +$0.0066
Dollar Index: 102.71 -0.70
Gold: $1894.00 +$3.30
Bitcoin: 22,719 -241
Crude Oil: $77.62 -$0.85
DJIA: 34,196 +250
NASDAQ: 12,025 +115
S&P 500: 4146 +28
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.