CHM Blog

For a brief moment about 6:30 am ET this morning the 10 year note yield traded unchanged from Friday, after that it increased, by 9 am the 10 year note 4.91% +7 bps, MBS prices -25 bps. No data releases today.

This week is packed with key economic data and the FOMC meeting that will leave rates unchanged, not a soul thinks the Fed will increase rates. October manufacturing and service sector indexes, Sept JOLTS job openings, and the elephant October employment data.

Treasury set to announce its needs to borrow later today. The US debt climbing rapidly, Treasury must borrow more. Investors are going to demand higher rates to fund the debt, one hard reason interest rates will fight a strong headwind to retreat, even if inflation declines the debt will keep rates higher than would be the case. In August when Treasury announced its funding needs the 10-year and 30-year yields to their highest point since November—and caused volatility for the S&P 500 and Dow Jones Industrial Average. Since then, yields on the 10-year bonds—a key economic indicator—have gone up by 80 basis points, through Friday’s close. The forecasts project the deficit to be between $1.6 trillion to $1.9 trillion in fiscal 2024, a level like fiscal year 2023 and significantly higher than before the pandemic, as borrowing costs on debt have swelled. Treasury will release the request at 3 pm today. The complete refunding announcement is Wednesday, traders will focus on Treasury’s borrowing needs, maybe more than the FOMC.

Beside the heavy US calendar, The Bank of England, the Bank of Japan will meet this week. Eurozone CPI, GDP, Tuesday. Eurozone unemployment, Friday.

At 9:30 am the DJIA opened +261, NASDAQ +92, S&P +29. 10 year note 4.90% +7 bps. FNMA 6.5 30 year coupon at 9:30 am -22 bps from Friday’s close and -6 bps from 9:30 am Friday.

This Week’s Calendar:

PRICES @ 10:00 AM

10 year note: 4.89% +6 bp

5 year note: 4.82% +4 bp

2 year note: 5.07% +4 bp

30 year bond: 5.04% +2 bp

30 year FNMA7.0: @9:30 am 100.97 -20 bp (-7 bp from 9:30 am Friday)

30 year FNMA 6.5: @9:30 am 99.16 -22 bp (-6 bp from 9:30 am Friday)

30 year FNMA 6.0: @9:30 am 97.00 -31 bp (-9 bp from 9:30 am Friday)

30 year GNMA 6.0: @9:30 am 97.64 -27 bp (-4 bp from 9:30 am Friday)

Dollar/Yuan: $7.3168 -$0.0005

Dollar/Yen: 149.74 +0.08 yen

Dollar/Euro: $1.0608 +$0.0044

Dollar Index: 106.30 -0.26

Gold: $2008.70 +$10.20

Bitcoin: 34,420 -168

Crude Oil: $83.95 -$1.59

DJIA: 32,728 +311

NASDAQ: 12,828 +185

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.