October 5th, 2023 9:46 AM by Richard Sardella MLO.100007700/NMLS 233568
Yesterday some improvement in a very overbought treasury market, the 10 declined 7 bps, MBS prices increased 56 bps. There was no fundamental reason for the improvement, it was driven by technical issues. This morning the 10 year began up 3 bps, MBSs at 9 am ET -16 bps.
Weekly jobless claims, expected at 210K were 207K up 2k from the previous week.
The August US trade deficit expected -$61.9B from -$64.7B in July was better at -$58.3B, a three-year low.
Fed officials today: San Francisco Fed President Mary Daly speaks at the Economic Club of New York later, while Cleveland Fed President Loretta Mester speaks at Chicago Fed’s annual payments symposium. Minneapolis Fed President Neel Kashkari will moderate a Q&A at an event in Minnesota. The Bloomberg Sustainable Business Summit is held today in New York.
The ouster of Kevin McCarthy as speaker is presently increasing the odds that next month the government may shutdown. One remark this morning, the odds of a shutdown has increased to 80%, that is quite a statement but is possible unless Republicans get a speaker quickly and one that can successfully get an agreement. The clock is ticking, just 40 days before a partial shutdown.
At 9:30 am the DJIA opened -5, NASDAQ -8, S&P -2. 10 year note, already seeing volatility, at 9:30 am -3 bps after beginning the day +5 bps. FNMA 6.0 30 year coupon at 9:30 am -6 bps from yesterday’s close and +24 bps from 9:30 am yesterday.
Other than Fed comments through the day there is nothing left on the calendar. Tomorrow’s Sept employment report should keep markets quiet today. The employment data can surprise, increasing the potential of volatility in the morning.
PRICES @ 10:00 AM
10 year note: 4.71% -2 bp
5 year note: 4.69% -5 bp
2 year note: 5.04% -3 bp
30 year bond: 4.88% +2 bp
30 year FNMA 6.5: @9:30 am 99.73 +3 bp (+3 bp from 9:30 am yesterday)
30 year FNMA 6.0: @9:30 am 97.91 -6 bp (+24 bp from 9:30 am yesterday)
30 year GNMA 5.5: @9:30 am 96.36 +2 bp (+21 bp from 9:30 am yesterday)
Dollar/Yuan: $7.2005 +$0.0027
Dollar/Yen: 148.59 -0.44 yen
Dollar/Euro: $1.0523 +$0.0019
Dollar Index: 106.65 -0.15
Gold: $1834.50 -$0.30
Bitcoin: 27,982 +327
Crude Oil: $83.28 -$0.94
DJIA: 33,104 -26
NASDAQ: 13,182 -54
S&P 500: 4255.32 -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.