October 21st, 2020 9:02 AM by Richard Sardella MLO.100007700/NMLS 233568
The 10 yr. note is on its way to 0.90% after cracking 0.80% yesterday and this morning. We've been warning for weeks that our technical analysis has been bearish, but until yesterday the 10 yr. had held at its first support at 0.80%. There is a lot of trading left today, so we won't have a clear read until the close today. Stock indexes in early pre-open trading were generally unchanged from yesterday. Whether the 10 yr. stays above 0.80% today depends on what happens with the stimulus efforts.
Stimulus remains key for the outlook. Yesterday Pelosi set down a deadline that by the end of yesterday, a deal was critical, but it's Wednesday and no deal. Most of the news, though, is that both Dems and GOP are still talking.
Drew Hammill, a spokesman for the Speaker; "Today's deadline enabled the Speaker and Secretary to see that decisions could be reached and language could be exchanged, demonstrating that both sides are serious about finding a compromise," Hammill said in a statement. "On several open questions, the Speaker and the Secretary called for the committee chairs to work to resolve differences about funding levels and language."
Pelosi told Bloomberg's, David Westin. "I am optimistic because I do think we have a shared value, not many, but a shared value that, finally, they want to crush the virus." "And that has been a change from even over the weekend when they put forth language that wasn't respectful of what we needed to do from the standpoint of science to crush the virus." "We all want to get an agreement because people need it and it's urgent, and our economy needs it," she continued. "We're on a path. You have to be optimistic. As the secretary and I say to each other, if we didn't believe we could get this done, why would we even be talking to each other?"
McConnell told reporters yesterday, "If a presidentially supported bill clears the House at some point we'll bring it to the floor," but he said he didn't say whether he would support such a deal or encourage GOP members to back it.
Chicago Federal Reserve Bank President Charles Evans said; he is "reasonably confident" the US economic recovery will maintain momentum into next year, but that without more fiscal stimulus the recovery could stall and more job losses could become permanent (Reuters).
In New York, 1.5 million people cannot afford food, making food pantries their lifeline (The New York Times).
White House Chief of Staff Mark Meadows said the goal in talks with House Speaker Nancy Pelosi is a deal on a coronavirus relief package within the next 48 hours. "The last 24 hours have moved the ball down the field," Meadows said on Fox Business Wednesday morning, after the latest round of talks between Pelosi and Treasury Secretary Steven Mnuchin. The goal is "some kind of deal in the next 48 hours or so."
Tomorrow night the final debate.
On Monday, the Senate will vote on Barrett's nomination to become an associate justice on the Supreme Court.
At 7:00 am ET this morning, weekly MBA mortgage applications slipped for the second week in a row. The composite -0.6%, purchase apps -2.0% and refinances +0.2%.
At 9:30 am ET, the DJIA opened -30, NASDAQ +19, S&P unchanged. 10 yr. 0.81% +2 bp. FNMA 2.0 30 yr. coupon at 9:30 am -11 bps from yesterday's close, and -13 bps from 9:30 am yesterday. The 2.5 coupon at 9:30 am -6 bps from yesterday and -10 bps from 9:30 yesterday.
At 1:00 pm ET, $22B 20 yr. bond auction.
At 2:00 pm ET, the Fed Beige Book.
PRICES @ 10:00 AM ET
10 yr. note: 0.81% +3 bp
5 yr. note: 0.35% +2 bp
2 Yr. note: 0.14 %unch
30 yr. bond: 1.63% +3 bp
Libor Rates: 1 mo. 0.145%; 3 mo. 0.215%; 6 mo. 0.251%; 1 yr. 0.337% (10/20/20)
30 yr. FNMA 2.0: @9:30 102.92 -11 bp (-13 bp from 9:30 yesterday)
30 yr. FNMA 2.5: @9:30 104.28 -6 bp (-10 bp from 9:30 yesterday)
30 yr. GNMA 2.5: @9:30 104.25 -5 bp (-8 bp from 9:30 yesterday)
Dollar/Yuan: $6.6537 $-0.0230
Dollar/Yen: 104.56 -0.95 yen
Dollar/Euro: $1.1856 +$0.0032
Dollar Index: 92.70 -0.37
Gold: $1927.40 +$12.00
Crude Oil: $40.92 -$0.78
DJIA: 28,432 +124
NASDAQ: 11,612 +95
S&P 500: 3462 +19
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.