CHM Blog

Prior to the June employment data at 8:30 am ET the 10 year note traded at 4.25% -3 bps.

June employment rate thought to be at 4.3% declined to 4.1% and down from 4.2% in May. NFP jobs estimates were for 110K reported at 147K and May revised from 139K to 144K. The report in line with the average monthly gain of 146K over the prior 12 months. Private jobs expected at 100K increased just 74k jobs and May private jobs originally 140K revised to just 137 in line with ADP’s private jobs yesterday at -33K. Average hourly earnings month/month +0.2% against estimates of +0.3%, year/year +3.7% down from 3.8% in May. The labor participation rate thought to be 62.5% fell to 62.3%. Overall, a very nice employment picture. The 10 year increased to 4.34% +6 bps from yesterday’s close, MBS price declined 19 bps. Stock indexes prior to the report were flat, the initial reactions send the key indexes higher on better NFP jobs.

Before this report there was a growing belief in markets of a possible rate cut from the Fed on July 30th, the next FOMC meeting; those optimistic thoughts went out the window now.

Weekly jobless claims added to the idea jobs are holding well, expected at 340K reported at 233K -4K from the previous week. Continuing claims were unchanged from the prior week at 1.964 million still the highest since December 2021; estimates were 1.960 million.

Also at 8:30 am, May US trade deficit expected at -$70.8B fell to -$71.5B and down from $60.3B in April. imports decreased 0.1% to a seven-month low, exports fell 4%.

At 9:30 am the DJIA opened +90, NASDAQ +120, S&P +23. 10 year note 4.33% +5 bps. FNMA 6.0 30 year coupon at 9:30 am -12 bps from yesterday and -5 bps from 9:30 am yesterday. Haven’t seen lender prices yet but expect lenders will ignore the narrow difference between 9:30 am yesterday and 9:30 am today.

At 10 am June ISM services sector index expected at 50.5 from 49.9, reported at 50.8.

In other news, the BBB bill worked through the House last night and will vote today to pass it then to the President to sign, likely later today or tomorrow on the 4th of July. The US and Vietnam have a trade deal.

Labor market stronger than thought, inflation isn’t increasing. The report this morning removes any thought of a rate cut at the July FOMC meeting later this month.

The bond and mortgage markets will close early today at 2 pm, stocks trade regular hours.

PRICES @ 10:00 AM

10 year note: 4.33% +5 bp

5 year note: 3.94% +6 bp

2 year note: 3.88% +8 bp

30 year bond: 4.85% +4 bp

30 year FNMA 6.0: @9:30 am 101.45 -12 bp (-5 bp from 9:30 am yesterday)

30 year FNMA 6.5: @9:30 am 103.15 -5 bp (-10 bp from 9:30 am yesterday)

30 year GNMA 6.0: @9:30 am 101.36 -4 bp (+8 bp from 9:30 am yesterday)

Dollar/Yen: 144.70 +1.04 yen

Dollar/Euro: $1.1773 -$0.0028

Dollar Index: 97.07 +0.30

Gold: $3,348.20 -$12.30

Bitcoin: 109,922 +172

Crude Oil: $67.07 -$0.38

DJIA: 44,783 +253

NASDAQ: 20,534 +140

S&P 500: 6263 +35

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.