CHM Blog

Yesterday markets opened with the Russian weekend coup, media made a story of it but US and global markets were non-plused and didn’t react. This morning all is forgiven between Putin and Prigozhin’s private army. Prigozhin went into exile in Belarus. Putin saying those responsible will face consequences. Prigozhin said he wasn’t trying to oust Putin’s government but would keep his mercenary company going despite official efforts to shut it down. It is a weird story although at this point the world sees it as a domestic matter.

At 8:30 am ET May durable goods orders were stronger that forecasts for the third month in a row. New orders expected -1.0% increased 1.7%, excluding transportation orders expected 0.0% increased 0.6%, core capital goods expected 0.6% increased 0.7%, just +2.0% year/year. The transportation sector is generally volatile with commercial plane orders, in May those orders increased 33% from April, offsetting military aircraft that declined 35%; auto orders increased 2.0% from unchanged in April. Business investment increased 0.7% and rose for the second straight month.

April Case/Shiller home price index stronger than forecasts at +0.5% increasing 0.9%; unadjusted +1.7%. year/year price thought to be -2.3% down -1.7%.

At 9:30 am the DJIA opened +34, NASDAQ +63, S&P +13. 10 year note at 3.70% -2 bp. FNMA 6.0 30 year coupon +6 bps from yesterday’s close and +15 bps from 9:30 am yesterday. The 5.5 coupon at 9:30 am +6 bps and +7 bps from 9:30 am yesterday.

At 10 am June consumer confidence from the Conference Board expected at 104.0 reported at 109.7, the best since Jan 2022.

Also at 10 am, May new home sales expected at 667K from 683K in April; reported a huge increase at 763K.

After Powell’s testimony last week indicated more rate increases are coming markets left with continued uncertainty but increasingly tilting toward another increase. In Europe, expectations are firming for another ECB rate hike in September, as policymakers speak at the two-day Sintra conference, where Fed Chairman Powell will deliver a speech tomorrow.

The 10 am data sent the 10 year note from 3.71% to 3.75%, MBS prices at 10 am 10 bps weaker than at 9:30 am. The 10 beside reacting to the stronger data this morning has key technical support at 3.69% the low yesterday and early this morning. From the fundamental perspective, traders see another rate increase at the July FOMC meeting.

PRICES @ 10:00 AM

10 year note: 3.75% +3 bp

5 year note: 4.01% +4 bp

2 year note: 4.72% +5 bp

30 year bond: 3.83% +2 bp

Libor Rates: 1 month 5.178%; 3 month 5.521%; 6 month 5.674%; 1 year 5.885% (6/26/23)

30 year FNMA 6.0: @9:30 am 101.22 +6 bp (+15 bp from 9:30 am yesterday) @10:00 am MBS prices declined.

30 year FNMA 5.5: @9:30 am 100.02 +6 bp (+7 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 99.94 +3 bp (+2 bp from 9:30 am yesterday)

Dollar/Yuan: $7.2065 -$0.0311

Dollar/Yen: 134.45 -0.05 yen

Dollar/Euro: $1.0970 +$0.0061

Dollar Index: 102.37 -0.33

Gold: $1937.30 +$3.50

Bitcoin: 30,565 +394

Crude Oil: $68.70 -$0.67

DJIA: 33,764 +46

NASDAQ: 13,370 +35

S&P 500: 4336 +8

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.