CHM Blog

This morning trade tariffs still the main focus with most attention now on the EU as negotiations grind. CNBC reporting the EU could be preparing to use an “anti-coercion instrument” to try to deter a looming 30% tariff on its exports to the States. The act is designed to stop coercion in trade disputes. The anti-coercion measures allow the EU to impose various restrictions on access to the EU market, notably to public procurement, as well as the ability of U.S. suppliers to sell food and chemicals in the bloc. August 1st approaching rapidly, no deal and the US will impose 30% tariffs, the EU looking for 10%.

The US is continuing trade negotiations with key partners, including Japan, Thailand, and Malaysia. The administration may issue additional unilateral tariff notices, and further trade agreements could be reached ahead of the August 1st deadline. As long as tariffs are the headline US interest rates are subject to any news.

This week there isn’t much economic data to override the focus on trade, weekly jobless claims on Thursday is all there is for data, tomorrow Treasury will auction $13B of 20 year bonds. The 20 year is kind of an odd term for investors. The ECB will meet on Thursday, expectations are no rate cuts this time around after aggressively cutting rates over the last year.

Powell spoke this morning at the Integrated Review of the Capital Framework for Large Banks Conference, in his brief remarks at the start of a conference at the central bank on large bank capital standards, Powell said the Fed had to be open to new ideas on how to improve the capital frameworks for large banks; said nothing about current Fed policy.

At 9:30 am ET the DJIA opened -40, NASDAQ -17, S&P -3. 10 year note at 9:30 am 4.37% -1 bp. FNMA 6.0 30 year coupon at 9:30 am +5 bps from yesterday’s close and +4 bps from 9:30 am yesterday.

PRICES @ 10:00 AM

10 year note: 4.36% -2 bp

5 year note: 3.89% -3 bp

2 year note: 3.84% -3 bp

30 year bond: 4.93% -2 bp

30 year FNMA 6.0: @9:30 am 101.34 +5 bp (+4 bp from 9:30 am yesterday)

30 year FNMA 6.5: @9:30 am 103.04 -5 bp (-7 bp from 9:30 am yesterday)

30 year GNMA 6.0: @9:30 am 100.28 +3 bp (unch from 9:30 am yesterday)

Dollar/Yen: 146.63 -0.75 yen

Dollar/Euro: $1.1702 +$0.0005

Dollar Index: 97.76 -0.10

Gold: $3,428.10 +$21.70

Bitcoin: 118,962 +2184

Crude Oil: $66.24 -$0.96

DJIA: 44,411 +88

NASDAQ: 20,793 -181

S&P 500: 6287 -19

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.

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MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.