CHM Blog

Daily Market Analysis July 7, 2022

July 7th, 2022 9:48 AM by Richard Sardella MLO.100007700/NMLS 233568


Daily Market Analysis

Stock indexes started better. Early trade in MBSs (8 am ET) down 20 bps from yesterday’s 64 bp decline. By 9:30 am MBS prices back to unchanged from yesterday.

The FOMC minutes released yesterday pointed to officials solidifying their resolve in June to keep raising interest rates for longer to prevent higher inflation from becoming entrenched, even if that slowed the US economy. From the minutes “Many participants judged that a significant risk now facing the committee was that elevated inflation could become entrenched if the public began to question the resolve of the committee,”… “They recognized the possibility that an even more restrictive stance could be appropriate if elevated inflation pressures were to persist.” The word “recession” was not mentioned once in the minutes, compared with 90 references to inflation. Recently with inflation moderating (not increasing or decreasing) there was optimism that at the July FOMC meeting the FOMC would increases the FF rate by just 50 bps instead of 75 bps that had been widely believed, the minutes and all of the aggressive comments recently from Jerome Powell have dashed that idea.

The next FOMC meeting is three weeks away, although today it’s a 75 bp increase expected, there are two key inflation releases next Wednesday and Thursday that could change present expectations: June CPI on Wednesday and June PPI on Thursday.

Weekly jobless claims at 235K, estimates were 230K. The rise in claims underscores some moderation in what’s been an extremely tight labor market, as applications hold near the highest level since January. The four-week moving average, a measure which smooths out some of the volatility in the series, ticked up somewhat to 232,500. It’s risen in 12 of the last 13 weeks.

At 9:30 am the DJIA opened +216, NASDAQ +62, S&P +24. 10 yr. note 2.93% unchanged. FNMA 4.5 30 yr. coupon ay 9:30 am -5 bps from yesterday and -77 bps from 9:30 am yesterday. (At 9:45 am MBS price down 14 bps)

The bellwether 10 yr. note has traded in a wide range since yesterday, from 2.98% to 2.90%; traders still battling the idea of a recession and what the FOMC will do on July 27th. Two key inflation reports next week that should keep interest rates in their current ranges.

Crude oil continuing its volatility today, gold up a little as the dollar is unchanged this morning; the dollar at its highest level in 20 yrs.

ADP didn’t report its June private jobs this morning. Tomorrow June employment data from BLS.

PRICES @ 10:00 AM

10 yr note: 2.96% +2 bp

5 yr note: 3.00% +1 bp

2 Yr note: 3.00% +3 bp

30 yr bond: 3.15% +2 bp

Libor Rates: 1 mo 1.807%; 3 mo 2.391%; 6 mo 2.998%; 1 yr 3.554% (7/6/22)

30 yr FNMA 5.0: @9:45 am 101.63 -12 bp (-86 bp from 9:30m yesterday)

30 yr FNMA 4.5: @9:45 am 100.27 -9 bp (-81 bp from 9:30 am yesterday)

30 yr GNMA 4.0: @9:45 am 99.53 -11 bp (-77 bp from 9:30 am yesterday)

Dollar/Yuan: $6.7011 -$0.0069

Dollar/Yen: 135.81 -0.12 yen

Dollar/Euro: $1.0184 unch

Dollar Index: 106.99 -0.10

Gold: $1743.90 +$7.40

Bitcoin: 20,498 +104

Crude Oil: $102.95 +$4.42

DJIA: 31,298 +261

NASDAQ: 11,512 +150

S&P 500: 3882 +37

About Richard Sardella

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.

About This Report And Disclosure Information

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.

Posted by Richard Sardella MLO.100007700/NMLS 233568 on July 7th, 2022 9:48 AM

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