January 4th, 2022 9:09 AM by Richard Sardella MLO.100007700/NMLS 233568
At 8:00 am ET the 10 1.68% +4 bps and MBS prices down 11 bps. Stock indexes rallied yesterday with new highs for the S&P and DJIA, in futures trading prior to the 9:30 am open the indexes also continuing their movements from yesterday.
Investors of all types are not acting as if the omicron is much of a deal in the near or long term; new highs this morning on the opening of the stock market. Markets believe the Fed will be increasing interest rates in the spring.
One of the current concerns in the interest rate markets that is gaining some momentum and pushing rates higher is talk that possibly the Fed may consider beginning to reduce its balance sheet beside ending the $120B a month purchases and increasing rates. The Fed’s balance sheet is $8.76 trillion; whether the Fed begins to reduce its balance sheet is questionable, maybe too much for markets to absorb in an orderly manner. Tomorrow the FOMC minutes frm the Dec 15th meeting.
At 9:30 am the DJIA +195, NASDAQ +8, S&P +17. 10 yr 1.67% +4 bp. FNMA 2.5 30 yr coupon at 9:30 am -12 bps from yesterday and down 40 bps frm 9:30 am yesterday.
At 10:00 am Dec ISM manufacturing index, expected at 60.5 frm 61.1, as reported 58.7.
Also, at 10:00 am the November JOLTS job openings expected at 11.060 mil, as reported 10.562 mil.
Look for market volatility to increase in the next few days, the 10 yr approaching near term oversold levels and just 3 bps away from 1.70%, a key support level. Last Friday, the end of 2021, the 10 yr note ended at 1.51%, the 5 yr note at 1.27%; this morning the 10 at 1.68% and the 5 at 1.38%, less than two trading sessions. 10 yr note so far
PRICES @ 10:00 AM
10 yr note: 1.66% +2 bp
5 yr note: 1.37% +1 bp
2 Yr note: 0.78% unch
30 yr bond: 2.06% +3 bp
Libor Rates: 1 mo 0.101%; 3 mo 0.209%; 6 mo 0.339%; 1 yr 0.583% (1/3/22)
30 yr FNMA 3.0: @9:30 103.28 -5 bp (-23 bp frm 9:30 yesterday)
30 yr FNMA 2.5: @9:30 101.44 -12 bp (-40 bp frm 9:30 yesterday)
30 yr GNMA 2.5: @9:30 101.97 -8 bp (-25 bp frm 9:30 yesterday)
Dollar/Yuan: $6.3547 -$0.0014
Dollar/Yen: 116.29 +0.97 yen
Dollar/Euro: $1.1286 -$0.0012
Dollar Index: 96.35 +0.13
Gold: $1808.30 +$8.20
Bitcoin: 47,243 +1.341
Crude Oil: $76.88.+$0.80
DJIA: 36,870 +286
NASDAQ: 15,571 -81
S&P 500: 4809 +13
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.