CHM Blog

The 10 year note yesterday +7 bps, 2 year +7 bps. This morning a little better start, at 8 am ET the 10 was down 2 bps but by 9 am unchanged from yesterday.

Weekly MBA mortgage applications declined again, the composite -2.9%, purchase apps -2.1% with re-finances -4.7%.

Not much direct news early this morning.

Here we go again, the debt ceiling must be increased, or the government will shut down on October 1st. It is a semi-annual battle that has no end in sight, expect to hear a lot of chatter, doom, and gloom from media. The most recent battle to increase the debt ceiling until the end of the fiscal year (9/30) led rating agencies to lower the US rating from AAA to AA2. Government spends like an inebriated sailor.

Congress has just 11 days in session to get a continuing resolution to fund spending after the end of the month, it will dominate September. According to the Associated Press some Republicans are openly wanting a shut down. The Biden impeachment, Biden’s health, the war in Ukraine will be making headlines and potentially roiling US financial markets trading.

The economy’s strength continues to surprise with its power, defying the view that it won’t last. Consumer spending strong, and presently expected to continue and economists are back to the drawing broads increasing forecasts. This morning the Atlanta Fed GDPNow, its forecast for Q3 growth; according to the present assessment Q3 will grow by 5.6% but down from 5.9% three weeks ago. The GDP forecasts are adjusted based on incoming data.

At 9:30 am the DJIA opened -92, NASDAQ -37, S&P -13. 10 year note 4.25% -1 bp. FNMA 6.0 30 year coupon at 9:30 am -3 bps from yesterday’s close and -22 bps from 9:30 am yesterday.

At 9:45 am the final PMI services sector index for August, expected at 51.0, as released the index declined to 50.5.

At 10 am the August ISM services sector index, expected at 52.4 from 52.7, the index reported at 54.5. The stronger index pushed the 10 year note from 4.25% to 4.30%.

This afternoon at 2 pm the Fed’s beige Book, details from all 12 Fed districts, generally not a market mover.

Technically, last week and Monday the 10 year note yield fell to 4.10%. Fundamentally, the outlook for stronger growth has pushed the 10 year note back up to 4.30% at 10 am.

PRICES @ 10:00 AM

10 year note: 4.30% +4 bp

5 year note: 4.42% +3 bp

2 year note: 5.00% +5 bp

30 year bond: 4.37% unch

30 year FNMA 6.0: @9:30 am 99.80 -3 bp (-22 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 98.15 -4 bp (-43 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 98.55 +5 bp ( -31 bp from 9:30 am yesterday)

Dollar/Yuan: $7.3063 +$0.0020

Dollar/Yen: 147.18 -0.55 yen

Dollar/Euro: $1.0735 +$0.0013

Dollar Index: 104.73 -0.08

Gold: $1950.30 -$2.30

Bitcoin: 25,701 unchanged

Crude Oil: $86.89 +$0.20

DJIA: 34,580 -62

NASDAQ: 13,899 -122

S&P 500: 4474 -23

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.