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Daily Market Analysis November 22, 2021

November 22nd, 2021 9:41 AM by Richard Sardella MLO.100007700/NMLS 233568


Daily Market Analysis

The 10 yr note at 5:30 am ET this morning 1.59% +5 bp. At 9 am 1.57%, MBS prices at 9 am -11 bps frm the late selling last Friday. Stock indexes in futures markets traded stronger.

Breaking: Pres. Biden will give Powell a second term (nominate), Leal Brainard to Vice Chair.

This is a short week crammed with Treasury auctions and a lot of key data points. Thursday markets closed, Friday a short trading day. By Wednesday afternoon all scheduled news will have been reported and trading volume will thin out as many rush home to pick up the bird. Wednesday’s economic releases will flow out like a damaged dam, and will occur after the treasury auctions now having to calculate what Powell and the Fed will do with Powell’s second term.

This week has a lot to work through, not the least is Treasury selling $176B of notes. It starts today at 11:30 am with the 2 yr note and at 1 pm the 5 yr auction. Tomorrow the 7 yr auction. Usually bundling auctions into a short week hasn’t gone well; and with Biden’s announcement this morning renominating Jerome Powell adds a wrinkle that may add new thoughts for the auctions. The two-year note’s yield at one point on Friday sank as much as 5.8 basis points as government bond markets globally priced in the possibility of another economic slowdown that could stave off central bank rate increases. Diminished liquidity alongside still heightened volatility and uncertainty around the policy path could certainly impact the reception of upcoming Treasury auctions, U.S. traders dialed back Fed rate-hike expectations, with lift-off pushed out to September from July next year and two hikes still priced in by the end of 2022.

At 8:30 am the Chicago Fed National Activity index, expected at 0.90 but reported at 0.76; the Sept index -0.18. The Chicago Fed National Activity Index (CFNAI) is a monthly index that tracks overall economic activity and inflationary pressures. The CFNAI is a weighted average of 85 existing monthly indicators of national economic activity. It is constructed to have an average value of zero and a standard deviation of one. Since economic activity tends toward trend growth over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend.

At 9:30 am the DJIA opened +142, NASDAQ +83, S&P +24. 10 yr 1.60% +6 bps. FNMA 2.5 30 yr coupon at 9:30 am -22 bps frm Friday and -36 bps frm 9:30 am Friday.

At 10 am Oct existing home sales, expected 6.200 mil, as reported 6.34 mil; yr/yr -5.8%. (details this afternoon)

At 11:30 $ 58B 2 yr note auction.

At 1 pm $59B of 5 yr notes up for sale.

A week like this, shortened by Thanksgiving and flush with a lot of key economic releases, is prone to increased volatility.

PRICES @ 10 AM

10 yr. note: 1.59% +5 bp

5 yr. note: 1.27% +4 bp

2 Yr. note: 0.55% +3 bp

30 yr. bond: 1.95% +4 bp

Libor Rates: 1 mo. 0.094%; 3 mo. 0.1164%; 6 mo. 0.229%; 1 yr. 0.391% (11/19/21)

30 yr. FNMA 3.0: @9:30 am 103.84 -11 bp (-24 bp from 9:30 am Friday)

30 yr. FNMA 2.5: @9:30 am 102.20 -20 bp (-26 bp from 9:30 am Friday)

30 yr. GNMA 2.5: @9:30 am 102.20 -16 bp (-28 bp from 9:30 am Friday)

Dollar/Yuan: $6.3842 -$0.0030

Dollar/Yen: 114.59 +0.56 yen

Dollar/Euro: $1.1255 -$0.0026

Dollar Index: 96.43 +0.40

Gold: $1819.70 -$31.90

Bitcoin: 58,315 1,223

Crude Oil: $76.09 +$0.15

DJIA: 35,866 +295

NASDAQ: 16,198 +140

S&P 500: 4742 +44

About Richard Sardella

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.

About This Report And Disclosure Information

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.

Posted by Richard Sardella MLO.100007700/NMLS 233568 on November 22nd, 2021 9:41 AM

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