November 2nd, 2021 10:52 AM by Richard Sardella MLO.100007700/NMLS 233568
10 yr. began unchanged this morning; MBS prices +6 bps from yesterday. There are no economic releases today. Today the FOMC meeting begins but with no news until tomorrow. Stock indexes began generally unchanged.
Federal Reserve policy makers are expected to announce this week that they will start scaling back their massive asset-purchase program amid greater concern over inflation. The forecast for underlying inflation now suggests rate hikes could arrive a little sooner than previously expected -- in early, rather than mid-to-late, 2024; not sure I would agree, central banks will more likely talk about increasing rates by late next year. Waiting until 2024 is implying the end of supply chain issues and lowering prices soon, following the Fed’s continual comments that inflation won’t last long. Amazon said its entire fourth-quarter profit could be wiped out by a surge in the cost of labor and fulfillment. Apple said it lost $6B in sales because of inability to meet demand, and could lose more next quarter. The Fed can’t wait two years before facing increasingly higher prices, and it is very doubtful traders and investors will buy into that kind of time frame.
House Speaker Nancy Pelosi plans to hold votes this week on both the infrastructure bill and President Joe Biden’s signature stimulus package. A number of centrists in House said they would like to see a Congressional Budget Office score of the bill to ensure new spending is paid for. CBO scoring on the draft legislation would take two weeks. Mrs. Pelosi is planning to attend the global climate summit in Glasgow, the summit will go on until November 12th. Over the weekend Pres. Biden took half of his cabinet to the meeting.
At 9:30 am the DJIA opened +32, NASDAQ -14, S&P +3. 10 yr. at 9:30 am 1.55% -1 bp. FNMA 2.5 30 yr. coupon at 9:30 am +11 bps from yesterday and +32 bps from 9:30 am yesterday.
Even with the FOMC tomorrow there is still some demand for US debt, the 10 at 1:30 am dropped to 1.54% -2 bps from US trade yesterday. Yesterday MBS prices increased 11 bps, at 10 am this morning +16 more. The 10 ended yesterday unchanged, this morning at 10 am down 1 bp to 1.55%. While the FOMC meeting tomorrow and on Friday the October employment data, the demand for US debt continues to impress.
PRICES @ 10:00 AM
10 yr. note: 1.55% -1 bp
5 yr. note: 1.16% -2 bp
2 Yr. note: 0.48% -2 bp
30 yr. bond: 1.97% +1 bp
Libor Rates: 1 mo. 0.081%; 3 mo. 0.141%; 6 mo. 0.211%; 1 yr. 0.367% (11/1/21)
30 yr. FNMA 3.0: @9:30 am 104.41 +6 bp (+18 bp from 9:30 am yesterday)
30 yr. FNMA 2.5: @9:30 am 102.91 +11 bp (+32 bp from 9:30 am yesterday)
30 yr. GNMA 2.5: @9:30 am 102.63 +8 bp (+24 bp from 9:30 am yesterday)
Dollar/Yuan: $6.3984 +$0.0007
Dollar/Yen: 113.81 -0.19 yen
Dollar/Euro: $1.1592 -$0.0013
Dollar Index: 93.95 +0.08
Gold: $1794.10 -$1.70
Bitcoin: 63,285 +2,220
Crude Oil: $83.31 -$0.74
DJIA: 35,917 +3
NASDAQ: 15,633 +37
S&P 500: 4624 +11
Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 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.