November 9th, 2021 10:57 AM by Richard Sardella MLO.100007700/NMLS 233568
After a pause yesterday the 10 yr. this morning resuming its decline, at 8:45 am ET 1.45% from 1.50% yesterday. MBS prices at 8:45 am +17 bps from yesterday. At 8:30 am October PPI; unusual that the estimates were exactly as they were reported. PPI +0.6%, yr./yr. +8.6%; core PPI +0.4% as expected, yr./yr. +6.8%. Tomorrow we will get the October CPI, what consumers are paying; current forecasts are +0.5% from 0.4% in Sept, yr./yr. +5.8% rm 5.4% in Sept; core +0.4% from +0.2% in Sept, yr./yr. +4.3% from 4.0%.
Not a market-mover, but the October NFIB small business optimism index slipped from Sept from 99.1 to 98.2.
This afternoon Treasury will auction $39B of new 10 yr. notes.
Biden is closing in on appointing the next Fed chair, while Powell is still considered the likely choice, Biden interviewed Federal Reserve Governor Lael Brainard last week. Monday Governor Randal Quarles announced he would step down before the end of the year. Quarles’ tenure as vice chair for supervision expired in October, Vice Chair Richard Clarida’s term as a governor expires at the end of January and there is an open position on the seven-seat board. If he chose Brainard, Biden would be nominating someone who would excite Democrats in Congress but put Republicans and large banks on edge -- setting up a tougher confirmation battle in the Senate, where Democrat’s command only 50 of the 100 seats. Still, Vice President Kamala Harris would be able to cast a tie-breaking vote. The Pres has key slots to fill.
At 9:30 am the DJIA opened -21, NASDAQ +43, S&P +6. 10 yr. at 9:30 am 1.45% -5 bp. FNMA 2.5 coupon at 9:30 am +20 bps from yesterday.
Single-family homes built to rent are emerging as the hottest corner of the U.S. property market, as investors respond to booming demand from home-seekers priced out of housing for sale. Steep down payment requirements for homes are driving more people to keep renting, even as rents rise. The expected risk-adjusted annual return for built-to-rent investments in the private market is now about 8% on average, according to securities advisory Green Street, the highest of 18 property sectors tracked by the firm. Close to 100,000 built-to-rent homes will have started construction this year, according to estimates from Brad Hunter, founder of the Hunter Housing Economics consulting firm. Investors have poured about $30 billion in debt and equity into the sector in 2021, with many billions more in future commitments, Mr. Hunter said.
The 10 yr. note early this morning dropped to 1.44%, a month ago 1.44% was a technical support level, now a resistance point. Tomorrow October CPI is expected to show increases in inflation (see above). Not expecting additional improvement today unless the stock market were to roll over on strong selling (and that doesn’t appear likely). Rate markets still uneasy after last Thursday and Friday, although our short term technicals are fractionally bullish.
PRICES @ 10:00 AM ET
10 yr. note: 1.44% -5 bp
5 yr. note: 1.08% -4 bp
2 Yr. note: 0.42% +2 bp
30 yr. bond: 1.83% -6 bp
Libor Rates: 1 mo. 0.091%; 3 mo. 0.145%; 6 mo. 0.219%; 1 yr. 0.352% (11/8/21)
30 yr. FNMA 3.0: @9:30 am 104.50 +9 bp
30 yr. FNMA 2.5: @9:30 am 103.09 +20 bp
30 yr. GNMA 2.5: @9:30 am 102.83 +33 bp
Dollar/Yuan: $6.3896 -$0.0031
Dollar/Yen: 112.83 -0.40 yen
Dollar/Euro: $1.1605 +$0.0018
Dollar Index: 93.95 -0.10
Gold: $1829.90 +$1.90
Bitcoin: 67,580 +1,612
Crude Oil: $82.87 +$0.94
DJIA: 36,263 -169
NASDAQ: 15,859 -123
S&P 500: 4678 -24
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.