CHM Blog

August inflation was less than expected, July revised lower than originally reported. PCE price index rose 0.3% month/month, following a downwardly revised 0.1% gain in July and slightly below market expectations of 0.4%. Goods prices increased 0.3%, rebounding from a 0.1% decline in July, led by a 0.5% rise in nondurable goods, mainly due to a 4.4% jump in gasoline and other energy goods prices. Durable goods inflation, meanwhile, eased to 0.1% from 0.4%. Services prices also accelerated to 0.3% from 0.1%, driven mainly by higher transportation services (1.4%) and food services and accommodations (0.5%). The month/month core PCE price index, excluding food and energy, rose 0.2%, below forecasts of 0.3%. Year/year core PCE inflation at 3.0% down from 3.3% in July, forecasts were +3.3%.

August personal income expected +0.5% month/month, increased 0.2%. Personal spending thought to be +0.8%, increased 0.9%.

September ADP jobs were expected +70K, reported at 90K, hiring accelerated for the first time since May. "It's a strong report. After a three-month slowdown, job creation rebounded and pay growth remained solid", according to Nela Richardson, ADP.

The final Q2 GDP was expected unchanged from the advance release last month at 1.5%, the economy grew by 2.2% a lot stronger than thought.

MBA mortgage applications fell 6% in the week ending September 25. Purchase apps -4.3%, re-finance apps -8.7%.

The Chicago September purchasing managers index estimated to be 51.0, increased to 58.8 from 47.1 in August.

The rather anemic reaction to less inflation this morning suggests investors and traders continue to focus on US and global debt. Crude oil is a drag, higher this morning.

PRICES @ 10:00 AM

10 year note: 5.24% -1 bp

5 year note: 5.03% -2 bp

2 year note: 4.84% -4 bp

30 year bond: 5.60% +3 bp

30 year FNMA 6.5: @9:30 am 100.733 +13 bp (+ 18 bp from 9:30 am yesterday)

30 year FNMA 6.0: @9:30 am 98.30 +22 bp (+15 bp from 9:30 am yesterday)

30 year GNMA 6.5: @9:30 am 100.61 +22 bp (+18 bp from 9:30 am yesterday)

Dollar/Yen: 156.79 -0.50 yen

Dollar/Euro: $1.1358 +$0.0015

Dollar Index: 101.21 -0.16

Gold: $4,216.10 +$36.40

Bitcoin: 84,460 +899

Crude Oil: $91.13 +$1.74

DJIA: 51,375 +25

NASDAQ: 26,984 +186

S&P 500: 7703 +32

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.

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.