CHM Blog

Weekly jobless claims continue to increase. Claims thought to be 234K from 236K the prior week increased to 263K up 27K. The four-week moving average, which eliminates week-to-week volatility, jumped by 9,750 to 240,500, the highest since June, the sharpest one-week increase since December of 2020. Continuing unemployment claims held at 1,932,000 in the last week of August, below expectations of 1,950,000 but remaining above averages since 2021. The employment sector continuing to slow.

The other major news this morning, August consumer prices (CPI). Month/month overall CPI increased 0.4% against estimates of 0.3%, twice the increase in July, annually at 2.9% as thought but increased from 2.7% in July. The core, excluding food and energy, month/month +0.3%, year/year +3.1% both as expected. On a monthly basis, shelter rose 0.4% and made the largest upward pressure.

The immediate reaction dropped the 10 year note to 4.00% from 4.05% yesterday but it didn’t hold and the 10 year note climbed back to 4.02% but still down 3 bps from yesterday. MBS prices at 9 am +11 bps from yesterday’s close.

Although month/month overall inflation did increase more than estimates (0.3%) to 0.4% and up from 0.2% in July, the continuing increase in unemployment is continuing to lead traders to believe the Fed will launch a series of rate cuts between now and year’s end, 25 bps next week at the FOMC meeting is a given, some think the Fed will up it to 50 bps although after the CPI this morning the FOMC will likely to hold to its pattern of 25 bp increments and hold off the next 25 for the October FOMC meeting.

At 9:30 am the DJIA opened +164, NASDAQ +91, S&P +23. 10 year note 4.03% -2 bps. FNMA 5.5 30 year coupon at 9:30 am +10 bps from yesterday’s close and +5 bps from 9:30 am yesterday.

At 1 pm Treasury will auction $22B of 30 year bonds; yesterday’s 10 year auction and Tuesday’s 3 year auctions saw very strong demand.

At 2 pm Treasury report the August budget, expected to show a deficit for the month at $310B.

PRICES @ 10:00 AM

10 year note: 4.02% -3 bp

5 year note: 3.57% -3 bp

2 year note: 3.47% -3 bp

30 year bond: 4.67% -3 bp

30 year FNMA 5.5: @9:30 am 101.23 +11 bp (+6 bp from 9:30 am yesterday)

30 year FNMA 6.0: @9:30 am 102.50 +10 bp (+2 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 101.18 +13 b p (+9 bp from 9:30 am yesterday)

Dollar/Yen: 147.44 -0.03 yen

Dollar/Euro: $1.1732 +$0.0039

Dollar Index: 97.67 -0.11

Gold: $3,659.60 -$22.40

Bitcoin: 114,096 +480

Crude Oil: $62.45 -$1.22

DJIA: 45,919 +428

NASDAQ: 21,970 +84

S&P 500: 6565 +33

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.