CHM Blog

July employment released at 8:30 am ET. The unemployment rate expected at 3.6% declined to 3.5%. NFP jobs expected at 200K increased 187K, June NFP jobs were revised from 209K to 185K; private jobs unlike the ADP jobs released last Wednesday increased 172K about in line with estimates. Average hourly earnings thought to be +0.3% increased 0.4% month/month, year/year forecasts at 4.2% increased 4.4%.

The recent data is adding to the view the economy will not slip into recession, how long that view will last depends on how investors digest the recent surprising news and the immediate reaction. The 10 year note from a short-term technical perspective is very overbought and should consolidate at present levels.

The release of the advance Q2 GDP expected +1.5% from +2.0% in Q1, increased 2.4%. Weekly jobless claims that were expected to have increased 235K from 228K claims declined 7K to 221K. News this week like gasoline on a fire. Long-term yields fell to record lows relative to the to the short end, as the Feds inflation-fighting campaign drove short-term yields higher. Now, with strong economic data and a wave of government-debt sales, that relationship is normalizing. Yesterday the July ISM services data prices paid component climbed higher, adding to inflation worries.

At 9:30 am the DJIA opened +86, NASDAQ +78, S&P +14. 10 year at 9:30 am 4.14% -5 bp. FNMA 6.0 30 year coupon +25 bps from yesterday’s close.

Nothing left on the calendar today. The 10 year note as noted above is overbought near term and we expect it will pull back; at 10 am the note already down 7 bps. MBS prices at 10 am 9 bps better than at 9:30 am.

PRICES @ 10:00 AM

10 year note: 4.12% -7 bp

5 year note: 4.20% -9 bp

2 year note: 4.81% -7 bp

30 year bond: 4.26% -3 bp

30 year FNMA 6.0: @9:30 am 100.22 +25 bp

30 year FNMA 5.5: @9:30 am 98.63 +25 bp

30 year GNMA 5.5: @9:30 am 98.72 +22 bp

Dollar/Yuan: $7.1729 +$0.0071

Dollar/Yen: 141.72 -0.82 yen

Dollar/Euro: $1.1024 +$0.0075

Dollar Index: 101.89 -0.65

Gold: $1978.40 +$9.60

Bitcoin: 29,225 +99

Crude Oil: $81.89 +0.34

DJIA: 35,351 +135

NASDAQ: 13,987 +28

S&P 500: 4514 +13

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.