July 2nd, 2021 9:23 AM by Richard Sardella MLO.100007700/NMLS 233568
June employment data: NFP jobs increased 850K on estimates of 720K, May jobs revised to 583K from 559K, private jobs increased 662K on estimates of 600K, the unemployment rate at 5.9% on estimates of 5.6%, May unemployment 5.8%, average hourly earnings +0.3% on forecasts of +0.4%, yr./yr. +3.6% against thoughts of 3.4%, labor participation rate 61.6% against 61.7%, manufacturing jobs increased 15K with expectations of 27K. The increase in jobs was the gain over the last 10 months. The Labor Department’s figures showed a 343,000 increase in leisure and hospitality payrolls; 188,000 gain in government payrolls. State and local government education employment rose about 230,000, boosted by seasonal adjustments to offset the typical declines seen at the end of the school year. Payrolls are still 6.76 million below their pre-pandemic level. The increase in the unemployment rate did not spook markets because people voluntarily left their jobs, and the number of job seekers rose.
The immediate reaction in the bond and mortgage markets didn’t move. At 8:45 am ET, 15 minutes after the data was released, the 10 yr. note traded unchanged from yesterday and the same in MBS markets….unchanged. The stock indexes in the futures markets increased, the DJIA at 8:45 am +94, NASDAQ +78, S&P +12. By 9:00 am, the 10 yr. declined to 1.44% -2 bps, and MBS prices increased 8 bps.
Tracking the movement: At 9:30 am ET this morning, the 10 yr. note at 1.45% unchanged from yesterday. FNMA 2.5 30 yr. coupon at 9:30 am +6 bps from yesterday’s close, and +11 bps from 9:30 am yesterday.
At 10:00 am May factory orders, expected +1.5%, as released +1.6%.
So far today, after all of the uncertainty that always happens leading to employment data, the 10 yr. note still hasn’t moved below its near-term resistance at 1.44%. It tested a few times recently, it is holding so far today. It’s been 90 minutes since the employment report, and so far, the thoughts of lower interest rates have not enticed investors. Inflation concerns still out there but equally not. Prices increasing on gasoline, food, auto sales, home prices, and commodities continue to get attention but with the Fed standing firm that inflation is a short-term situation, the increase in daily living costs are pushed aside. Regardless of the data, investors are not worried so far.
PRICES @ 10:00 AM ET
10 yr. note: 1.45% unch
5 yr. note: 0.88% -2 bp
2 Yr. note: 0.25% -1 bp
30 yr. bond: 2.06% unch
Libor Rates: 1 mo. 0.102%; 3 mo. 0.144%; 6 mo. 0.163%; 1 yr. 0.244% (7/1/21)
30 yr. FNMA 2.0: @9:30 101.09 +9 bp (+12 bp from 9:30 yesterday)
30 yr. FNMA 2.5: @9:30 103.47 +6 bp (+11 bp from 9:30 yesterday)
30 yr. GNMA 2.5: @9:30 103.20 +5 bp (+11 bp from 9:30 yesterday)
Dollar/Yuan: $6.4717 +$0.0026
Dollar/Yen: 111.34 -0.18 yen
Dollar/Euro: $1.1831 -$0.0021
Dollar Index: 92.59 unch
Gold: $1787.50 +$10.70
Bitcoin: 33,437 +27
Crude Oil: $74.87 -$0.36
DJIA: 34,661 +28
NASDAQ: 14,576 +53 (new high)
S&P 500: 4332 +12 (new high)
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.