CHM Blog

Prior to 8:30 am ET this morning the 10 year note had increased 3 bps to 4.63% from yesterday while the short end, 2 year note declined 3 bps. At 8:30 am weekly jobless claims thought to be 229K were 227K down 2K from the previous week, while not a big deal, claims were the lowest in four weeks, holding generally the same level. The report extended the period of relative strength in the US labor market. Claims rose by 36,000 to 1,903 million on the previous week, above expectations of 1,890 million, to reflect difficulty for unemployed individuals to find suitable employment. Initial unemployment claims for Federal government employees, which have been under scrutiny due to firings by DOGE, rose by 157 to 595. The immediate reaction brought the 10 year note back to 4.61%. Nothing in the data of consequence. The report covered the period in which the survey for the May employment report was conducted and should contribute to expectations that nonfarm payrolls will again show a relatively solid print.

Also at 8:30 am, the April Chicago Fed National Activity index weakened. The index declined to -0.25 from +0.03% in March. Production-related indicators contributed -0.18 in April, down from -0.07 the previous month. The sales, orders, and inventories category also dragged the index down with a -0.04 contribution, compared to +0.06 in March. Personal consumption and housing category fell to -0.04 from +0.09.

The President's budget bill passed in the House, now on to the Senate where there will be additional debate. Observers say it may take until August to get a final vote, any changes in the Senate will send the bill back to the House to work out differences. The projections are the bill will add $3B to the deficit over the next 10 years but doesn’t consider the tariff revenues that will take a month or two to see results.

At 9:30 am the DJIA opened -98, NASDAQ +15, S&P -7. 10 year at 9:30 am 4.59% -1 bp. FNMA 6.0 30 year coupon at 9:30 am -6 bps from yesterday’s close and -22 bps from 9:30 am yesterday.

At 9:45 am May preliminary PMI indexes; manufacturing index expected at 49.8 down from 50.2 in April increased to 52.3, the services sector estimates at 50.6 from 50.8 in April increased to 52.3. The composite at 52.1 from 50.6.

At 10 am April existing home sales, forecasted at 4.13 million year/year reported at 4.00 million, month/month -0.5%, year/year -2.0%. More details this afternoon.

On Monday and Tuesday, the 10 year increased 15 bps driven by renewed concerns over the increasing US debt with Moody’s cutting the US debt rating and more concerns of climbing deficits. The Fed isn’t yet ready to signal rate cuts, even if the Fed were to cut rates don’t look for much improvement at the long end of the curve, the last Fed cuts not only didn’t help the long end, the 10 year yield moved up.

PRICES @ 10:00 AM

10 year note: 4.60% unch

5 year note: 4.14% -3 bp

2 year note: 4.00% -3 bp

30 year bond: 5.12% +3 bp

30 year FNMA 6.0: @9:30 am 100.24 -6 bp (-22 bp from 9:30 am yesterday)

30 year FNMA 6.5: @9:30 am 102.18 -2 bp (-12 bp from 9:30 am yesterday)

30 year GNMA 6.0: @9:30 am 100.37 +5 bp (-19 bp from 9:30 am yesterday)

Dollar/Yen: 143.80 +0.12 yen

Dollar/Euro: $1.1296 -$0.0035

Dollar Index: 99.79 +0.23

Gold: $3,307.70 -$5.40

Bitcoin: 111,356 +2684

Crude Oil: $60.61 -$0.96

DJIA: 41,869 +8

NASDAQ: 19,007 +134

S&P 500: 5855 +11

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.