CHM Blog

At about 4:30 am ET this morning the 10 year note traded down to 3.96% -4 bps from yesterday, by 8:30 am the note at 3.98% -2 bps. MBS prices began trading with the 6.0 30 year coupon +5 bps. The only data point today, the June NFIB small business optimism index expected at 89.8 from 89.4 in May, the index increased to 91.0. This afternoon at 1 pm Treasury will auction $40B of 3 year notes.

More weakness in Europe, the July ZEW Economic Sentiment index in the Eurozone fell to -12.2 from -10.0 (expected -10.2). In Germany Economic Sentiment fell to -14.7 from -8.5 (expected -10.5) and July ZEW Current Conditions fell to -59.5 from -56.5 (expected -60.0). June CPI was up 0.3% month/month, as expected (last -0.1%) and up 6.4% year/year, as expected (last 6.1%).

No news today that impacts US interest rates. Today is about tomorrow, the June CPI inflation data. Yesterday afternoon May consumer credit was reported, credit card credit increased by $8.5B to $1.254 trillion. Nonrevolving credit decreased by $1.3B to $3.611 trillion. Consumer credit increased at a seasonally adjusted annual rate of 1.8% in May. Revolving credit increased at an annual rate of 8.2%, while nonrevolving credit decreased at an annual rate of 0.4%. Credit expansion in May was the slowest since November 2020, having been slowed by a decrease in nonrevolving credit that will raise concerns about a tightening in lending standards and weaker demand for credit in the face of higher financing rates.

At 9:30 am the DJIA opened +123, NASDAQ +15, S&P +9. 10 year at 9:30 am 3.99% -1 bps. FNMA 6.0 30 year coupon at 9:30 am +4 bps and 20 bps higher than 9:30 am yesterday; the 5.5 coupon +19 bps and 29 bp better than 9:30 am yesterday.

At 1 pm $40B 3 year note auction.

June CPI tomorrow is expected to show a decline; the month/month CPI +0.3% from +0.1% but year/year +3.1% from 4.0%. The core CPI, the more important expectation +0.3% month/month from +0.4%, year/year 5.0% from 5.3%.

Today may trade quietly ahead of tomorrow’s news. There has been no let up from Fed officials from Powell to all regional Fed banks that the Fed must keep going, we will see tomorrow how traders see it when the data is released at 8:30 am.

PRICES @ 10:00 AM

10 year note: 4.00% unch

5 year note: 4.25% +1 bp

2 year note: 4.88% +3 bp

30 year bond: 4.03% unch

30 year FNMA 6.0: @9:30 am 100.36 +4 bp (+20 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 98.83 +19 bp (+29 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 98.77 +13 bp (+11 bp from 9:30 am yesterday)

Dollar/Yuan: $7.2081 -$0.0235

Dollar/Yen: 140.88 -0.43 yen

Dollar/Euro: $1.0986 -$0.0016

Dollar Index: 101.91 -0.06

Gold: $1936.10 +$5.10

Bitcoin: 30,417 -377

Crude Oil: $73.62 +$0.63

DJIA: 34,031 +87

NASDAQ: 13,676 -9

S&P 500: 4415 +5

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.