May 9th, 2022 10:04 AM by Richard Sardella MLO.100007700/NMLS 233568
Early this morning (6 am ET) the 10 yr. note traded at 3.20% up 7 bps from Friday’s 7 bp increase, by 8:30 am at 3.14% +1 bp from Friday, volatility already. US stock indexes in futures markets, DJIA -349.
After last week’s FOMC and April employment data, this week has three inflation readings, CPI on Wednesday, PPI on Thursday and April import and export prices. There are also several Fed officials speaking through the week. Treasury will auction 3yrs, 10s and 30s, all new issues.
Not a lot of specific news this morning. The US dollar continues to dominate, the highest dollar valuation in two years. It is a run to safety in global markets. Hedge funds boosted long bets to the highest this year, according to data from the Commodity Futures Trading Commission in the week to May 6.
Concerns about slowing global growth are being driven by China. The nation’s Premier Li Keqiang warned on the weekend of a “complicated and grave” employment situation as Beijing and Shanghai tightened curbs on residents in a bid to contain Covid outbreaks in the country’s most important cities. China’s weak export reading comes on the heels of a report last week showed manufacturing activity plunged to its worst level since February 2020.
European Central Bank policymaker Holzmann voiced support for two or three rate hikes before the end of the year.
At 9:30 am the DJIA opened -431, NASDAQ -220, S&P -60. 10 yr. 3.13% unch after running to 3.20% overnight. FNMA 5.0 30 yr. coupon +16 bp from Friday.
New inflation data this week, Wednesday, Thursday, and Friday. CPI, PPI and import and export prices. Last month CPI and PPI both increased but not as much as estimates and led to thoughts that maybe inflation increases are moderating. The estimates for both in April are that inflation is still increasing but slowing a little. Getting tired of typing ‘volatility’ but it’s the most descriptive word to define the markets. If there are weak inflation like we saw last month the reaction will encourage ideas that although inflation will continue, it won’t be as severe as has been the case the last eight months, leading to thoughts the Fed may not have to go as far as had been widely thought.
PRICES @ 10:00 AM
10 yr note: 3.11% -2 bp
5 yr note: 3.00% -4 bp
2 Yr note: 2.64% -5 bp
30 yr bond: 3.24% +1 bp
Libor Rates: 1 mo 0.842%, 3 mo 1.401%; 6 mo 1.965%; 1 yr 2.649% (5/6/22)
30 yr FNMA 5.0: @10:00 am 103.20 +23 bp from Friday
30 yr FNMA 4.5: @10:00 am 101.16 (-3 bp from 10:00 am Friday)
30 yr GNMA 4.0: N/A
Dollar/Yuan: $6.7238 +$0.0573%
Dollar/Yen: 130.78 +0.24 yen
Dollar/Euro: $1.0532 -$0.0016
Dollar Index: 103.86 +0.20
Gold: $1862.80 -$20.00
Bitcoin: 32,973 -1631
Crude Oil: $106.63 -$3.14
DJIA: 32,518 -381
NASDAQ: 11,860 -264
S&P 500: 4055 -68
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.