CHM Blog

Markets waited all week for this morning’s CPI inflation data, the first actual data point since the shut down. Inflation slightly better than consensus estimates. Month/month overall CPI +0.3% against forecasts of +0.4%, year/year overall +3.0%, better than 3.1% expected. The core, the more interesting set; month/month +0.2% against estimates of +0.3%, year/year +3.0% better than 3.1% expected.

The report clears up any doubt that the Fed will cut the FF rate next Wednesday when the FOMC meets and Powell does his press conference. The initial reaction saw a little improvement in rates and in the stock indexes. Traders and investors had already believed a rate cut was coming unless inflation spiked, since it didn’t and slowed, the reactions were somewhat muted. Powell has said inflation remains a priority but is taking a back seat to the slowing employment sector and less about inflation. The rub, there hasn’t been any employment data for three weeks on weekly claims and the September employment report remains a mystery.

At 9:30 am the DJIA opened +23, NASDAQ +201, S&P +44. 10 year at 9:30 3.99% -1 bp. FNMA 5.5 30 year coupon at 9:30 +6 bps from yesterday’s close and -3 bp from 9:30 yesterday.

The University of Michigan final October consumer sentiment index thought to be at 55. It was reported at 53.6. The year-ahead inflation expectations eased for the second month to 4.6% in October.

PRICES @ 10:00 AM

10 year note: 4.01% +1 bp

5 year note: 3.61% unch

2 year note: 3.49% -1 bp

30 year bond: 4.60% +1 bp

30 year FNMA 5.5: @9:30 am 101.21 +6 bp (-3 bp from 9:30 am yesterday)

30 year FNMA 6.0: @9:30 am 102.39 +3 bp (+1 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 100.96 +5 bp (-5 bp from 9:30 am yesterday)

Dollar/Yen: 152.72 +0.13 yen

Dollar/Euro: $1.1636 +$0.0017

Dollar Index: 98.86 -0.07

Gold: $4,127.10 -$18.50 (prior to 8:30 -$55.00)

Bitcoin: 110,791 +522

Crude Oil: $61.97 +$0.18

DJIA: 47,115 +380

NASDAQ: 23,191 +249

S&P 500: 6795 +57

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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