CHM Blog

The US and EU concluded their trade deal yesterday; both appeared to be pleased, 15% tariffs on most EU exports to the US; some products, including aircrafts and their components, some chemicals and pharmaceuticals, will not be subject to tariffs. The EU will be “purchasing hundreds of billions of dollars’ worth of military equipment,” and investing $600B in the US according to news reports. There has been no reaction to the deal in US financial markets as it was expected. In the meantime, a court case challenging whether the president has the authority to set reciprocal trade deals. Eventually the case will end up in the Supreme Court.

This is a huge week for potential market-moving news, the headline, the FOMC and Powell on Wednesday, followed by key inflation data on Thursday and July employment on Friday.

At 9:30 am the DJIA opened +20, NASDAQ +62, S&P +10. 10 year at 9:30 am 4.41% +2 bps. FNMA 6.0 30 year coupon at 9:30 am -10 bps from Friday’s close and +2 bps from 9:30 am Friday.

There is a lot of key data and news this week that presents the possibility of increased volatility. The Fed will not lower rates at the meeting but likely set the tone for a cut at the next meeting in September but that could blow up if inflation increases. Today two Treasury auctions, the recent demand has been solid. August 1st hits on Friday, key trade deals have been accomplished but once again the lower courts are tossing a wrench into whether the president has the authority to levy reciprocal trades.

PRICES @ 10:00 AM

10 year note: 4.42% +3 bp

5 year note: 3.98% +3 bp

2 year note: 3.94% unch

30 year bond: 4.97% +3 bp

30 year FNMA 6.0: @9:30 am 101.20 -10 bp (+2 bp from 9:30 am Friday)

30 year FNMA 6.5: @9:30 am 102.98 -4 bp (+1 bp from 9:30 am Friday)

30 year GNMA 6.0: @9:30 am 101.17 -8 bp (+1 bp from 9:30 am Friday)

Dollar/Yen: 148.27 +0.60 yen

Dollar/Euro: $1.1630 -$0.0012

Dollar Index: 98.33 +0.68

Gold: $3,3319.80 -$15.20

Bitcoin: 118,457 -545

Crude Oil: $66.68 +$1.52

DJIA: 44,819 -83

NASDAQ: 21,199 +91

S&P 500: 6395 +7

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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