October 5th, 2020 9:06 AM by Richard Sardella MLO.100007700/NMLS 233568
This morning, the 10 yr. note is edging its way toward testing the support at 0.74%, at 8:30 am ET 0.72%. MBS prices at 8:30 am -5 bps from Friday; by 9:30 am ET, the note traded 0.74%. This week doesn’t have much economic news; ISM non-manufacturing, weekly claims, consumer credit is about it. Treasury will auction $110B of 3s, 10s, and 30s. Pres. Trump’s infection will dominate debates, updates, opinions, and political discussions. There is the stimulus package still floating around; the country needs it, will it happen? Presently, it doesn’t look good, but we won’t be surprised that something will get done at the last minute.
According to the latest news, VP Pence will hit the campaign road for a four-day swing. Pence will step into the spotlight this week for a high-stakes debate against Democratic vice presidential nominee Kamala Harris, a MAGA rally in Arizona, and a brief stop in his home state of Indiana to cast an early ballot in the 2020 race.
At 9:30 am ET, the DJIA opened +254, NASDAQ +108, S&P +34. 10 yr. note at 0.74%. FNMA 2.0 30 yr. coupon at 9:30 am -5 bps from Friday and -6 bps from 9:30 Friday.
At 9:45 am ET, The final PMI Sept index composite index at 54.3 abut as expected; the service PMI at 54.6 is right on forecasts.
At 10:00 am ET, Sept ISM non-manufacturing index expected at 56.6 from 56.9, as released the index jumped to 57.8, the best since before the pandemic (Feb).
The 10 yr. yield this morning at the highest since the beginning of Sept., after pushing to 0.74%, the note slipped back and has spent a month trading in one of the tightest trading range we have seen for years. The note is back to 0.74% again. Will it breakthrough, and if it does, what would be the next target? Technically a close above 0.74% would suggest 0.80%; after that, 0.90%. MBSs recently have held nicely as the 10 yr. has crept slightly higher, now at a key technical level. This morning, MBS prices soft but still hanging in there; as long as the 10 yr. holds its support, we don’t expect major selling of MBSs.
PRICES @ 10:00 AM ET
10 yr. note: 0.743% +4.5 bp
5 yr. note: 0.30% +2 bp
2 Yr. note: 0.14% +1 bp
30 yr. bond: 1.55% +6 bp
Libor Rates: 1 mo. 0.140%; 3 mo. 0.233%; 6 mo. 0.244%; 1 yr. 0.357% (10/2/20)
30 yr. FNMA 2.0: @9:30 103.41 -5 bp (-6 bp from 9:30 am ET Friday)
30 yr. FNMA 2.5: @9:30 104.78 -3 bp (-14 bp from 9:30 am ET Friday)
30 yr. GNMA 2.5: @9:30 104.58 -11 bp (-11 bp from 9:30 am ET)
Dollar/Yuan: $6.7908 unch
Dollar/Yen: 105.56 +0.25 yen
Dollar/Euro: $1.1786 +$0.0069
Dollar Index: 93.44 -0.41
Gold: $1915.10 +$7.50
Crude Oil: $38.70 +$1.65
DJIA: 27,921 +239
NASDAQ: 11,225 +151
S&P 500: 3381 +33
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.