CHM Blog

The 10 year note opened the day up 2 bps at 3.41%, MBS prices at 8:30 am ET -11 bps. Yesterday the 10 tested its recent low at 3.36% but as in the past it didn’t hold and closed at 3.39%. Beside not being able to get below what traders are now calling a key level, the stock indexes began the morning higher, the DJIA traded +104 at 9 am.

More evidence prices are slowing; April import prices expected +0.3% up 0.4% but year/year -4.8% from -4.6% in March. Export prices +0.2%, year/year -5.9% from -4.8% in March.

Another Fed official; Fed Governor Michelle Bowman saying the Fed will likely need to continue increasing rates if prices continue to increase and the job market doesn’t slow down. She wants to see signs of “consistent evidence that inflation is on a downward path when considering future rate increases, and at what point we will have achieved a sufficiently restrictive stance for the policy rate.” Data this week showed strong employment and job gains with employment at 3.4%. European Central Bank policymaker Nagel repeated that the rate hike in May was not the last one of the cycle and that more tightening is likely after the summer.

Supporting the early improvement in the DJIA most of the questionable bank stocks that have been headlines recently began the day better. Jamie Dimon, JPMorgan Chase, said the said the regional-bank industry is quite strong, adding he believes it's nearing “the tail end” of the problem.

The debt ceiling coming close to default if something isn’t done by politicians, Biden and House Speaker Kevin McCarthy have postponed their meeting today. Treasury Secretary Janet Yellen continues to say the only good outcome would be to raise the debt ceiling. It gets a lot of interest in the press but so far there is no evidence markets are concerned. Not to worry, the US will not default, we go through this every couple of years and the angst always increases. Politicians specialize in last minute decisions.

At 9:30 am the DJIA opened +83, NASDAQ +27, S&P +11. 10 year note unchanged at 3.39%. FNMA 6.0 30 year coupon -6 bps and unchanged from 9:30 am yesterday; the 5.5 coupon -5 bp and -3 bp from 9:30 am yesterday.

At 10 am the mid-month U. of Michigan consumer sentiment index, expected at 63.0 from 63.5 at the final April index reading. The sentiment index dropped to 57.7. Consumers becoming mare concerned.

PRICES @ 10:00 AM

10 year note: 3.40% unch

5 year note: 3.38% +2 bp

2 year note: 3.94% +2 bp

30 year bond: 3.74% unch

Libor Rates: 1 month 107%; 3 month 5.321%; 6 month 5.349%; 1 year 5.2.66% (5/11/23)

30 year FNMA 6.0: @9:30 am 101.91 -6 bp (unch from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 100.94 -5 bp (-3 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 100.66 -6 bp (-3 bp from 9:30 am yesterday)

Dollar/Yuan: $6.9503 +$0.0016

Dollar/Yen: 134.88 +0.32 yen

Dollar/Euro: $1.0881 -$0.0035

Dollar Index: 102.25 +0.19

Gold: $2024.40 +$3.90

Bitcoin: 26,467 -553

Crude Oil: $71.56 +$0.69

DJIA: 33,369 +60

NASDAQ: 12,342 +13

S&P 500: 4139 +8

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.

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MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.