CHM Blog

Prior to 8:30 am ET the 10 year note traded down 1 bps from yesterday’s close. At 8:30 am May CPI, critical to the inflation outlook and what the FOMC statement might indicate tomorrow. CPI month/month expected +0.2% increased 0.1% and down from +0.4% in April, year/year expected +4.0% against 4.1% and down from 4.9% in April. Core CPI month/month +0.4% as expected, year/year core 5.3% as expected and down from 5.5% in April. Inflation remains elevated but is coming down, the core is key. The data confirms the Fed will pause tomorrow if there was any concern about it.

The PBOC (China’s central bank) unexpectedly lowered rates, a sign that officials are increasingly concerned about faltering growth and are stepping up stimulus to boost the recovery. The bank lowered the seven-day reverse repurchase rate by 10 basis points to 1.9%.

Tomorrow may PPI is on deck; month/month expected -0.1% from +0.2%, year/year +1.6% from 2.3% in April. The core month/month +0.2% unchanged from April, year/year +2.9% from 3.2%.

Thursday the ECB is expected to increase its base rate by 25 bps.

The homebuilders’ stocks are outpacing the S&P according to Citigroup Inc.’s analyst. Homebuilders are currently up 33% year-to-date, compared to the S&P 500’s 12% gain for that same time period. Strong buying continues, especially for prices over $300K and prices have stabilized. “We view the opportunity for further recovery in builder sales prices as less fully reflected in the stocks”. Lennar, which reports its second quarter results on Wednesday, will be the first builder to formally report May trends.

At 9:30 am the DJIA opened +67, NASDQ +92, S&P +17. 10 year 3.72 -2 bp. FNMA 6.0 30 year coupon +20 bps and +37 bp from 9:30 am yesterday

PRICES @ 9:30 AM

10 year note: 3.72% -2 bp

5 year note: 3.86% -4 bp

2 year note: 4.53% -5 bp

30 year bond: 3.88% unch

Libor Rates: 1 month 5.218%; 3 month 5.557%; 6 month 5.639%; 1 year 5.811% (6/12/23)

30 year FNMA 6.0: @ 9:30 am 101.50 +20 bp (+37 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 100.28 +20 bp (+36 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 100.34 +16 bp (+36 bp from 9:30 am yesterday)

Dollar/Yuan: $7.1428 -$0.0027

Dollar/Yen: 139.19 -0.42 yen

Dollar/Euro: $1.0802 +$0.0042

Dollar Index: 103.08 -0.57

Gold: $1979.40 +$9.70

Bitcoin: 26,059 +162

Crude Oil: $69.17 +$2.05

DJIA: 34,124 +57

NASDAQ: 13,558 +96

S&P 500: 4359 +20

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.