November 4th, 2020 9:27 AM by Richard Sardella MLO.100007700/NMLS 233568
Interest rates falling hard this morning on no winner yet, not unexpected. Last night at 7:15 pm ET, the 10 yr note rate increased to 0.94% from the 5:00 pm close at 0.89%; it then began to decline to 0.79% this morning. Technically it is what could have been expected, failing to hold at or above 0.90%. US stock indexes early today are doing better. According to the New York Times, President Trump trails Joe Biden 213-227 in the current delegate count, but results have yet to be called in seven states. The outlook is no winner until this afternoon, and possibly a few days.
The election results are the focus, but at 8:30 am ET, ADP reported private jobs at 365K with estimates at 600K.
At 9:30 am ET, the DJIA opened +247, NASDAQ +314, S&P +56. 10 yr at 9:30 am -.76% -13 bps. FNMA 2.0 30 yr coupon at 9:30 am +56 bps from yesterday’s close and +53 bps from 9:30 yesterday.
At 10:00 am ET, October ISM non-manufacturing index expected at 57.8, as released 56.6, the lowest since May.
The FOMC meeting begins today, and the Treasury will detail the quarterly refunding. More long-dated borrowing, over the coming quarter, but at a more moderate pace than earlier this year, as the government faces uncertain and potentially sizable borrowing needs due to the pandemic. Treasury estimated the government would borrow $617 billion from October through December, down from its $1.216 trillion estimates in early August.
We can’t make much from the market reactions this morning, no clear winner, but the decline in the 10 yr and 30 yr treasuries suggest there is still a divide between whether Biden or Trump will win. The 10 yr note yield has held to its next support at 0.90%, but the volatility is unusual.
A day to watch as the results trickle in, still seven key states not yet reporting.
PRICES @ 10:00 AM ET
10 yr note: 0.77% -13 bp
5 yr note: 0.33% -7 bp
2 Yr note: 0.15% -2 bp
30 yr bond: 1.53% -15 bp
Libor Rates: 1 mo 0.137%; 3 mo 0.224%; 6 mo 0.243%; 1 yr 0.334% (11/3/20)
30 yr FNMA 2.0: @9:30 103.56 +56 bp (+53 p frm 9:30 yesterday)
30 yr FNMA 2.5: @9:30 104.52 +28 bp (+30 bp frm 9:30 yesterday)
30 yr GNMA 2.5: @9:30 104.58 +6 bp +13 bp frm 9:30 yesterday)
Dollar/Yuan: $6.6652 -$0.0125
Dollar/Yen: 104.45 -0.06 yen
Dollar/Euro: $1.1706 -$0.0015
Dollar Index: 93.66 +0.11
Gold: $1899.50 -$10.90
Crude Oil: $37.98 +$0.32
DJIA: 27,999 +519
NASDAQ: 11,558 +399
S&P 500: 3452 +83
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.
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MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.