September 18th, 2023 9:13 AM by Richard Sardella MLO.100007700/NMLS 233568
At 9 am ET the 10 year note at 4.35%, the recent high for the last month and key technical resistance. This is FOMC week, but we won’t have anything to be concerned about until Wednesday afternoon. The Fed in a box, trying to navigate an economic soft landing while attempting to cool inflation. Each week it is becoming more difficult to meet that goal. While the Fed focuses most of its attention on the core inflation reports which excludes food and energy, energy prices continue to spike. The Fed must consider the impact of widespread increases with crude oil this morning close to $92.00/barrel from $68.00 three months ago. Later today Saudi Energy Minister Prince Abdulaziz bin Salman addresses an industry conference. And not to overlook, the UAW struck the auto industry last week wanting a share in the profits of automakers, another hurdle for the Fed combating inflation.
No increase in rates expected at this FOMC meeting but the November meeting is a toss-up. A month ago, the general belief with traders and investors was the Fed could calm inflation and the economy wouldn’t suffer a recession. Morgan Stanley’s Michael Wilson warning investors are turning more cautious, debating about whether a recession has been avoided or just delayed. “The majority of investors we’ve spoken with are in the ‘pushed out’ camp and are of the view that 2024 is now looking like a more challenging year for risk assets relative to 2023.” Looks like there is at least one more rate increase at the November FOMC meeting then the Fed will keep rates elevated throughout most of next year unless the economy rolls over into recession.
More central banks later this week. On Thursday, the Bank of England and the Bank of Japan will likely increase their rates.
At 9:30 am the DJIA opened +24, NASDAQ -35, S&P -2. Last week the three indexes ended generally unchanged after volatile trading all week. The FNMA 6.0 30 year coupon at 9:30 am -15 bps from Friday’s close and -26 bp from 9:30 am Friday.
At 10 am the NAHB reported its housing market index for September, expected to be unchanged from August at 50, the index dropped to 45.
PRICES @ 10:00 AM
10 year note: 4.34% +1 bp
5 year note: 4.48% +2 bp
2 year note: 5.06% +3 bp
30 year bond: 4.42% unch
30 year FNMA 6.0: @9:30 am 99.54 -15 bp (-26 bp from 9:30 am Friday)
30 year FNMA 5.5: @9:30 am 97.91 -14 bp (-31 bp from 9:30 am Friday)
30 year GNMA 5.5: @9:30 am 98.33 -14 bp (-30 bp from 9:30 am Friday)
Dollar/Yuan: $7.2973 +$0.0224
Dollar/Yen: 147.61 -0.21 yen
Dollar/Euro: $1.0670 +$0.0010
Dollar Index: 105.28 -0.05
Gold: $1945.20 unch
Bitcoin: 27,212 +759
Crude Oil: $91.65 +$0.88
DJIA: 34,548 -72
NASDAQ: 13,670 -11
S&P 500: 4445 -5
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.