May 9th, 2023 9:00 AM by Richard Sardella MLO.100007700/NMLS 233568
Started generally unchanged at 8 am ET, the 10 overnight declined to 3.48% -3 bps but crawled back to unchanged. MBS prices at 9 am down 16 bps from yesterday’s close. No real data today; the April NFIB small business optimism index slipped to 89.0 from 90.1 in March, no big deal.
The debt ceiling is the headline today although it won’t get settled and even when it does it isn’t likely to have any immediate impact on markets at the long end of the curve; at the short end the 2 year and lower may see some improvements. The debt problem always gets resolved, many times at the last minute like this is setting up to be. Yellen warning she will run out of money to pay debts by June 1st… plenty of time for politicians to kick the can. Pres. Biden scheduled to meet with Congressional leaders today for the first time.
Old news with new wrinkles; investors still betting (hoping) the Fed will pause its rate increases. Goldman Sachs and Barclays telling their clients may be less enthusiastic about pausing. Strategists at the banks expect an “on-hold Fed” given the rate decision pattern so far, with their observations arguing “against the extent of easing currently priced for this year.” The debate won’t end anytime soon with varying opinions aired on a regular basis. Yesterday the CFTC (Commodity Futures Trading Commission) said big hedging is happening in the futures markets, buying cash notes, simultaneously selling futures against them to control risk.
A couple of Fed officials today; NY Fed John Williams and Fed governor Phillip Jefferson. Jefferson according to the schedule at 8:30 am although haven’t heard from yet, Williams at 12 pm.
On a day with no market news of substance, something we would normally overlook, a Gallup Poll just released ; just 36% of US adults have a “great deal” or a “fair amount” of confidence Powell will do the right thing for the economy, a Gallup poll shows. That’s lower than Yellen’s 37% during her first year at the helm and beneath Ben Bernanke’s lowest point in 2012. Happens when the economic outlook is not robust, blame the Fed chair.
At 9:30 am the DJIA opened -80, NASDAQ -59, S&P -18. 10 year 3.51% unchanged. FNMA 6.0 30 year coupon at 9:30 am -17 bps and -11 bps from 9:30 am yesterday. The FNMA 5.5 coupon at 9:30 am -16 bps and -16 bps from 9:30 am yesterday.
Treasury will auction $40B of 3 year notes this afternoon, not a market mover.
Inflation data tomorrow (CPI) and Thursday (PPI). Today should be quiet ahead of those releases.
PRICES @ 10:00 AM
10 year note: 3.51% unch
5 year note: 3.49% -1 bp
2 year note: 4.02% +3 bp
30 year bond: 3.83% unch
Libor Rates: 1 month 5.104%; 3 month 5.337%; 6 month 353%; 1 year 5.200% (5/8/23)
30 year FNMA 6.0: @9:30 am 101.58 -17 bp (-11 bp from 9:30 am yesterday)
30 year FNMA 5.5: @9:30 am 100.53 -16 bp (-16 bp from 9:30 am yesterday)
30 year GNMA 5.5: @9:30 am 100.19 -25 bp (-25 bp from 9:30 am yesterday)
Dollar/Yuan: $6.9223 +$0.0099
Dollar/Yen: 135.18 +0.04 yen
Dollar/Euro: $1.0956 -$0.0050
Dollar Index: 101.72 +0.34
Gold: $2053.00 +$1.80
Bitcoin: 27,632 +67
Crude Oil: $72.78 -$0.38
DJIA: 33,620 +1
NASDAQ: 12,208 -50
S&P 500: 4124 -14
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.