September 22nd, 2021 8:50 AM by Richard Sardella MLO.100007700/NMLS 233568
Stocks traded better in pre-market futures trading this morning, the 10 yr. note and MBSs both unchanged at 9 am ET. The FOMC at 2 pm will keep interest rate markets still until then. Jerome Powell’s press conference is at 2:30 pm.
Weekly MBA mortgage applications last week were better, overall +4.9%, purchase apps +2.0% and re-finances up 7.0%.
Federal Reserve officials are weighing how and when to reduce the large-scale bond-buying efforts that the central bank launched early in the pandemic. The central bank in July gave its first signal that officials were more confident the economy was meeting their goals. Since then, senior leaders including Fed Chairman Jerome Powell have indicated they could start to reduce, or taper, those purchases this year. Investors will watch how strongly the Fed signals any plans to begin scaling back its bond purchases at its next meeting, on Nov. 2-3.
The Democratic-controlled House passed a bill that would suspend the U.S. debt ceiling into December 2022 and provide the government funding to operate past Sept. 30. Republicans have vowed to block it when it reaches the Senate over the debt limit provision.
At 9:30 am the DJIA opened +200, NASDAQ +50, S&P +20. 10 yr. 1.32% unchanged. FNMA 2.0 30 yr. coupon +4 bps and -3 bp from 9:30 am yesterday; the 2.5 coupon +1 bp and +1 bp from 9:30 am yesterday.
At 10 am August existing home sales. Forecasts were 5.900 mil down from 5.990 mil in July; as released 5.880 mil, down 2.0% from July and -1.5% yr./yr.
Markets will be quiet this morning until this afternoon when the FOMC releases its policy statement and Powell’s press conference. What happens then will depend on the tapering outlook and comments from the Fed on the inflation outlook. So far the Fed thinks the present increase in prices will be short-lived. That view is increasingly being questioned in markets.
Every technical indicator we use and our proprietary models are neutral, not a revelation after the last few weeks. Will the tight range hold, or break out later this afternoon?
PRICES @ 10:00 AM ET
10 yr. note: 1.32% unch
5 yr. note: 0.83% unch
2 Yr. note: 0.22% +1 bp
30 yr. bond: 1.86% unch
Libor Rates: 1 mo. 0.081%; 3 mo. 0.128%; 6 mo. 0.153%; 1 yr. 0.224% (9/21/21)
30 yr. FNMA 2.0: @9:30 am 101.06 +4 bp (-3 bp from 9:30 am yesterday)
30 yr. FNMA 2.5: @9:30 am 103.70 +1 bp (+1 bp from 9:30 am yesterday)
30 yr. GNMA 2.5: @9:30 am 103.23 unch (+4 bp from 9:30 am yesterday)
Dollar/Yuan: $6.4657 -$0.0017
Dollar/Yen: 109.61 +0.38 yen
Dollar/Euro: $1.1728 unch
Dollar Index: 93.26 +0.06
Gold: $1776.50 -$1.70
Bitcoin: 42,205 +92
Crude Oil: $71.66 +$1.17
DJIA: 34,227 +307
NASDAQ: 14,819 +73
S&P 500: 4385 +31
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.