CHM Blog

Over the weekend US and China met; the meeting concluded with agreement to reduce tariffs for 90 days to further more specific details. Specifically, the U.S. is cutting tariffs on China to 30% from 145% while China is cutting tariffs on U.S. goods to 10% from 125%, with each of those moves expected to last 90 days. Bessent said that throughout the process the U.S. has “had a plan.” The agreement between the two sides is essentially a 90-day pause that will see reciprocal duties halted though the 10% tariff as well as a 20% charge related to fentanyl remain in place.

The reaction sent the DJIA up over 1,000 points, the 10 year note +7 bps to 4.46%, MBS prices -14 bps from Friday. Gold fell, the dollar increased, crude higher. The 10 year note the highest since early April.

At 9:30 am ET the DJIA opened +1016, NASDAQ +716, S&P +160. 10 year at 9:30 am 4.47% +8 bp. FNMA 6.0 30 year coupon at 9:30 am -14 bps from Friday’s close and -15 bps from 9:30 am Friday.

As usual when there is a surprise the initial reaction overruns reality as is the case today, a little too much change in currencies, gold, and crude oil. The agreement with China is positive news, traders and markets were not expecting the lowering of tariffs at the meeting over the weekend.

PRICES @ 10:00 AM

10 year note: 4.46% +6 bp

5 year note: 4.10% +9 bp

2 year note: 4.00% +9 bp

30 year bond: 4.88% +4 bp

30 year FNMA 6.0: @9:30 am 100.77 -14 bp (-15 bp from 9:30 am Friday)

30 year FNMA 6.5: @9:30 am 102.49 -9 bp (-6 bp from 9:30 am Friday)

30 year GNMA 6.0: @9:30 am 100.74 -5 bp (-8 bp from 9:30 am Friday)

Dollar/Yen: 147.98 +2.60 yen

Dollar/Euro: $1.1126 -$0.0123

Dollar Index: 101.47 +1.13

Gold: $3,2444,10 -$100.10

Bitcoin: 103,799 -662

Crude Oil: $63.06 +$2.04

DJIA: 42,261 +1012

NASDAQ: 18,542 +619

S&P 500: 5805 +145

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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