CHM Blog

Yesterday the key 10 year note failed to crack its technical resistance at 4.50%, closing at 4.51%. This morning the 10 year note began at 4.55% +4 bps. Weekly jobless claims, the only data today, expected at 220K reported at 217K, the prior week revised from 217K to 220K. The 4-week average increased to 212.25K from 210.75K. Continuing claims rose for the seventh week in a row to 1.83 million +22K. That’s the highest level in seven months. Not much of a reaction to claims, the 10 year slipped one bp to 4.54%, stock indexes though increased on the data.

Absent key economic data this week, replaced by a stream of Fed officials, yesterday Jerome Powell addressed a Fed group but didn’t mention monetary policy. Today Powell is back at 2 PM at the 24th Jacques Polak Annual Research Conference, Washington. Chicago Fed Pres, Goolsbee commented the Fed will have to make sure that the rise in long-term bond yields doesn’t lead to over tightening of capital conditions in the U.S. economy, another hint the fed is finished increasing rates. The Bank of England weighed in saying no more rate increases. There are a couple of other Fed officials talking today, the only one that counts is Powell. ECB’s Christine Lagarde also expected to speak The European Central Bank's latest economic Bulletin showed a determination to pressure inflation back to the 2.0% target in a timely manner. European Central Bank policymaker De Guindos said that it is too early to discuss potential rate cuts. Bank of England's Chief Economist Pill said that more rate hikes are not needed to curtail inflation.

At 9:30 am the DJIA opened +22, NASDAQ +28, S&P +7. 10 year note at 9:30 4.53% +2 bps. FNMA 6.5 30 year coupon at 9:30 am -10 bps from yesterday’s close and -7 bps from 9:30 am yesterday.

At 1 pm Treasury will auction $24B of new 30s, yesterday’s 10 year auction was decent but nothing spectacular; expect the 30 to be well bid.

At 2 pm Powell.

Other than Powell this afternoon there isn’t anything that will generate much market movement, even then Powell may stay away from any monetary comments. The 10 year finding strong resistance at 4.50%.

PRICES @ 10:00 AM

10 year note: 4.53% +2 bp

5 year note: 4.55% +4 bp

2 year note: 4.96% +3 bp

30 year bond: 4.69% +7 bp

30 year FNMA 7.0: @9:30 am 101.90 -23 bp (-14 bp from 9:30 am yesterday)

30 year FNMA 6.5: @9:30 am 100.65 -10 bp (-7 bp from 9:30 am yesterday)

30 year FNMA 6.0: @9:30 am 99.03 -14 bp (-5 bp from 9:30 am yesterday)

30 year GNMA 6.0: @9:30 am 99.68 -2 bp (+14 bp from 9:30 am yesterday)

Dollar/Yuan: $7.2851 +$0.0048

Dollar/Yen: 150.91 -0.07 yen

Dollar/Euro: $1.0714 +$0.0002

Dollar Index: 105.57 -0.03

Gold: $1958.80 $1.00

Bitcoin: 37,656 +2,060

Crude Oil: $76.31 +$0.98

DJIA: 34,121 +9

NASDAQ: 13,670 +20

S&P 500: 4390 +7

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.

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MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.