CHM Blog

Weekly MBA mortgage applications declined last week; the composite index -5.7%, purchases -4.8% and re-finances -7.7%.

Yesterday Biden rescheduled his trip next week to work on the debt ceiling. The late afternoon meeting between Biden and Congressional leaders was short but the parties agreed to let negotiators try to hammer out an agreement. They will try to produce a plan to deliver to Biden when he returns from Asia, he is cutting his trip short in hopes of deal that will keep the US from defaulting as of June 1st according to treasury Sec Janet Yellen. An agreement would send stock indexes higher and interest rates lower with safety concerns lessening.

WSJ reporting this morning that House Democrats plan to begin collecting signatures Wednesday for a discharge petition to raise the debt ceiling, a long-shot parliamentary maneuver designed to circumvent House Republican leadership and force a vote. A discharge petition requires 218 signatures, regardless of party—a majority of the House—to dislodge a bill from committee and move it to the floor. The move isn’t likely to succeed; time consuming, they rarely work so not suited to this short time frame. No discharge petition has been successful since 2015. Every time we get into this debt ceiling debate it doesn’t get passed until the last minute which in this case likely to be after Memorial Day. Speaker McCarthy telling FOX news “This is our moment to change the behavior to make sure, that hardworking taxpayer, that we’re not wasting their money.”

April housing starts and permits at 8:30 am ET; starts expected 1.405 mil were 1.401 mil, starts in March revised to 1.371 mil from 1.420 mil. Permits expected at 1.430 mil were 1.416 mil, March revised to 1.437 mil from 1.413 mil.

At 9:30 am the DJIA opened +140, NASDAQ +52, S&P +20. 10 year at 9:30 am -2 bp at 3.52%. FNMA 6.0 coupon -6 bps and -9 bp from 9:30 am yesterday; the 5.5 30 year coupon +3 bps and +9 bp from 9:30 am yesterday.

Not a market mover, but at 1 pm Treasury will auction $15B of 20 year bonds, an outlier in the yield curve.

PRICES @ 10:00 AM

10 year note: 3.55% +1 bp

5 year note: 3.55% +2 bp

2 year note: 4.12% +4 bp

30 year bond: 3.86% unch

Libor Rates: 1 month 5.111%; 3 month 5.345%; 6 month 5.379%; 1 year 5.278% (5/16/23)

30 year FNMA 6.0: @9:30 101.55 -6 bp (-9 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 100.45 +3 bp (+9 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 100.27 unch 9+8 b p from 9:30 am yesterday)

Dollar/Yuan: $6.9951 +$0.0179

Dollar/Yen: 137.16 +0.78 yen

Dollar/Euro: $1.0824 -$0.0041

Dollar Index: 102.95 +0.39

Gold: $1986.20 -$6.80

Bitcoin: 26,744 -215

Crude Oil: $71.92 +$1.06

DJIA: 33,088 +76

NASDAQ: 12,339 -4

S&P 500: 4114 +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.

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