CHM Blog

Daily Market Analysis January 9, 2023

January 9th, 2023 8:52 AM by Richard Sardella MLO.100007700/NMLS 233568


Daily Market Analysis

At 8:30 am ET this morning the 10 yr note unchanged at 3.57%, overnight the note increased to 3.61%. MBS prices at 9 am +20 bps from Friday’s close. There isn’t much data this week but what there is doesn’t happen until Thursday with Dec CPI and Friday Dec import and export prices. Treasury will auction 3s, 10s, and 30s Tuesday, Wednesday, and Thursday; the 10 yr on Wednesday is key.

A couple of Fed speakers today; Atlanta President Raphael Bostic is due to speak at 12:30 pm, as is San Francisco Fed President Mary Daly in a separate event.

Last Friday’s BLS employment data pushed the 10 yr note down 15 bps and MBS prices +67 bps. Decline in average hourly earnings m/m and yr/yr. Dec employment rate was thought to be 3.7% unchanged from Nov, as released unemployment declined to 3.5%. Non-farm jobs increased 233K against 200K expected; private jobs +220K better than 175K expected. Average hourly earnings estimates +0.4% m/m dropped to +0.3%, yr/yr 4.6% with estimates at 5.0%. The labor participation rate at 62.3% from 62.2%. Wage inflation slowing, unemployment declining and jobs stronger than expected. The unemployment rate the lowest since 1969.

Employment data positive for lower rates, it wasn’t until the Dec ISM services index was released at 10 am that the strong rally in treasures really took off. The service sector has been the strongest component in the economy but for the first time since the pandemic the index fell into contraction. Dec ISM services sector index expected at 55.0 from 56.5; the index hit at 49.6, a contraction, employment 49.8 from 51.5, prices paid 67.6 from 70.0, new orders 45.2 from 56.0.

Last week Amazon announced 11K job cuts, a huge number but just 1.0% of its payroll. Over the weekend Goldman Sachs is embarking on one of its biggest job reductions, 3,200.

At 9:30 am the DJIA opened +90, NASDAQ +103, S&P +22. 10 yr note 3.58% +2 bps. FNMA 5.5 30 yr coupon at 9:30 am +17 bps from Friday’s close and +69 bps from 9:30 am Friday.

At 12:30 pm San Francisco Fed President Mary Daly joins Nick Timiraos, The Wall Street Journal’s chief economics correspondent, to discuss her outlook for the economy, inflation and interest rates in 2023.

The dollar is continuing its decline after months of increasing.

Near term technicals on the 10 yr and MBSs are positive now. Looking for the 10 yr note to work its way to 3.40% where there is a lot of resistance.

PRICES @ 10:00 AM

10 yr note: 3.57% +1 bp

5 yr note: 3.70% -1 bp

2 Yr note: 4.23% -5 bp

30 yr bond: 3.71% +3 bp

Libor Rates: 1 mo 4.402%; 3 mo 4.810%; 6 mo 5.197%; 1 yr 5.559% (1/6/23)

30 yr FNMA 6.0: @9:30 am 102.41 +14 bp (+56 bp from 9:30 am Friday)

30 yr FNMA 5.5: @9:30 am 101.41 +17 bp (+69 bp from 9:30 am Friday)

30 yr GNMA 5.5: @9:30 am 101.30 +6 bp (+55 bp from 9:30 am Friday)

Dollar/Yuan: $6.7767 -$0.0618

Dollar/Yen: 131.84 -0.27 yen

Dollar/Euro: $1.0729 +$0.0085

Dollar Index: 103.28 -0.60

Gold: $1881.40 +$11.70

Bitcoin: 17,224 +272 (one of the biggest moves since FTX failed)

Crude Oil: $75.88 +$2.11

DJIA: 33,774 +143

NASDAQ: 10,747 +177

S&P 500: 3952 +36

About Richard Sardella

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.

About This Report And Disclosure Information

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.

Posted by Richard Sardella MLO.100007700/NMLS 233568 on January 9th, 2023 8:52 AM

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