CHM Blog

Daily Market Analysis October 11, 2022

October 11th, 2022 8:57 AM by Richard Sardella MLO.100007700/NMLS 233568


Daily Market Analysis

Early this morning (7:30 am ET) the 10 yr. note yield hit 4.00% up 11 bps from Friday, by 9 am the note yield backed down to trade at 3.92% +3 bps from Friday. The spike driven by increasing concerns in the UK market turbulence. There is a liquidity concern within pension funds pushing the Bank of England to continue purchasing UK gilts (bonds). Yesterday and again today the central bank has added to its arsenal of tools aimed at curbing market turbulence. The move, coming on the heels of Monday’s record selloff in inflation-linked debt, had the immediate effect of bringing some calm to the market.

There are no economic releases today, just $40B 3 yr. note auction this afternoon. After today though the week is full of key information.

  • Tuesday,
  • 1 pm $40B 3 yr. note auction

  • Wednesday,
  • 7 am weekly MBA mortgage applications

    8:30 am Sept PPI (+0.2% m/m from -0.1% in August; yr./yr. +8.4% from +8.7%; ex food and energy m/m +0.3% from +0.2%)

    1 am $32B 10 yr. note auction

    2 pm FOMC minutes

  • Thursday,
  • 8:30 am weekly jobless claims (225K from 219K)

    Sept CPI (+0.2% m/m from +0.1%, yr./yr. +8.1% from 8.3%; core CPI +0.4% from +0.6% m/m, yr./yr. +6.5% from +6.3%)

    1 pm $18B 30 yr. bond auction

  • Friday,
  • 8:30 Sept retail sales (+0.2% from +0.3%, ex autos -0.1% from -0.3%, ex autos and gas +0.4% from +0.3%)

    10 am U. of Michigan mid-month consumer sentiment index (58.8 from 58.6 in Sept)

The International Monetary Fund’s Annual Meeting begins today in Washington. The heads of the IMF and World Bank already rang the alarm bells Monday, warning that the risks are rising of a global recession as advanced economies slow and faster inflation forces the Fed to raise interest rates, adding to the debt pressures on developing nations. Jerome Powell is likely to resist behind-the-scenes pressure at international meetings this week to let up on steep US interest-rate hikes that are putting pressure on economies around the world. Yesterday Fed vice chair Brainard kind of winked, that maybe the Fed needs to slow down. Another issue that will be on the front burner, the continual increase in the dollar; rocking developing countries that borrowed heavily in dollars and raising the cost of dollar-priced energy and other imports for richer nations grappling with historically high inflation.

This week has a lot going on, beside inflation data tomorrow and Thursday, the IMF, and quotes almost daily. The global economy will expand 2.7% in 2023, down from 3.2% this year and 6% in 2021, the multilateral lender said this morning in its latest World Economic Outlook. The new forecast represents a reduction of 0.2 percentage point from its July estimate. So far Jerome Powell has held strong that the Fed will increase the FF rate when the FOMC meets on Nov 2nd. A global recession is a certainty, winter coming, and Europe not prepared to cope. Risks for speculators are running high before Thursday’s release of the consumer price index. Anything above the prior reading of 8.3% would be big trouble.

PRICES @ 10:00 AM

10 yr note: 3.93% +4 bp

5 yr note: 4.15% unch

2 Yr note: 4.29% -2 bp

30 yr bond: 3.93% +8 bp

Libor Rates: 1 mo 3.317%; 3 mo 3.919%; 6 mo 4.427%; 1 yr 5.050% (10/10/22)

30 yr FNMA 5.0: @9:30 am 96.95 -17 bp (+11 bp from 9:30 am Friday)

30 yr FNMA 5.5: @9:30 am 99.17 -6 bp (+9 bp from 9:30 am Friday)

30 yr GNMA 5.0: @9:30 am 97.47 -23 bp (-6 bp from 9:30 am Friday)

Dollar/Yuan: $7.1648 +$0.0103

Dollar/Yen: 145.69 -0.03 yen

Dollar/Euro: $0.9711 +$0.0008

Dollar Index: 113.15 +0.01

Gold: $1674.90 -$0.20

Bitcoin: 19,091 -151

Crude Oil: $89.49 -$1.64

DJIA: 29,120 -83

NASDAQ: 10,4210 -133

S&P 500: 3580 -32

About Richard Sardella

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.

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 October 11th, 2022 8:57 AM

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