CHM Blog

According to the White House the US and the UK have a trade deal. Beside a deal the Bank of England cut rates yesterday following EU cuts. Stock indexes higher on the news adding to yesterday’s gains. Powell said the Fed is content but increasingly concerned about the economy going forward, reminding the job market remains good and although inflation hasn’t increased it isn’t going down. Although investors are comforted a trade deal has been concluded it wasn’t with major trading countries: South Korea, Japan, India, or Vietnam.

Weekly jobless claims were thought to be +232K from +241K the previous week; claims reported at 228K -13K. The 4 week average at 227K up from 226K last week; the prior week’s claims increased to a two month high, today’s decline largely erased the jump. Continuing claims also declined, reported two weeks ago continuing claims declined by 29K to 1.879 million after hitting a three year high a month ago. Claims today add to Powell’s statements yesterday US employment is holding well.

Preliminary Q1 productivity and unit labor costs. Unit labor costs in the U.S. non-farm business sector rose by 5.7% in the first quarter, surpassing market expectations of a 5.1% increase and accelerating sharply from a downwardly revised 2.0% gain in the previous period. It marked the largest quarterly rise in labor costs since a 7.4% jump in Q3 2022, driven by a 4.8% increase in hourly compensation. Productivity thought to be -0.5% declined to -0.8%, the first decline in non-farm business sector labor productivity since the second quarter of 2022. Output went down by 0.3%, while hours worked rose by 0.6%. On an annual basis, labor productivity increased by 1.4%.

This afternoon at 1 pm Treasury will complete its borrowing with $125B of new 30 year bonds. Last Tuesday’s 10 year auction met with solid demand.

At 9:30 am the DJIA opened +2130. NASDAQ +189, S&P +37. 10 year at 9:30 am 4.29% +2 bps. FNMA 6.0 30 year coupon at 9:30 am +3 bps from yesterday’s close and +9 bps from 9:30 am yesterday.

A positive step with a trade agreement with the UK but still no word of deals with major trading partners. Some talks with China this weekend in Switzerland; it will take months to work out a trade deal.

PRICES @ 10:00 AM

10 year note: 4.30% +3 bp

5 year note: 3.91% +4 bp

2 year note: 3.84% +5 bp

30 year bond: 4.79% +1 bp

30 year FNMA 6.0: @9:30 am 101.24 +3 bp (+9 bp from 9:30 am yesterday)

30 year FNMA 6.5: @9:30 am 102.93 +5 bp (+10 bp from 9:30 am yesterday)

30 year GNMA 6.0: @9:30 am 100.98 -1 bp (+5 bp from 9:30 am yesterday)

Dollar/Yen: 144.51 +0.69 yen

Dollar/Euro: $1.1304 +$0.0002

Dollar Index: 99.92 +0.31

Gold: $3,370.60 -$21.30

Bitcoin: 99,496 +3289

Crude Oil: $59.18 +$1.11

DJIA: 41,297 +183

NASDAQ: 17,858 +120

S&P 500: 5658 +27

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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MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.