Market Wrap-up
Our benchmark FNMA MBS 6.00 August Coupon is currently up +62 BPS.
Jobs, Jobs, Jobs: Its Big Jobs Friday! You can read the official release from the BLS here. Here is the Tale of the Tape:
Jobs:
July Non Farm Payrolls (NFP) were up 187K versus estimates of 200K
June NFP were revised lower from 209K to 185K
May NFP were revised lower from 306K down to 281K
The more closely watched rolling three month average is now 217K
Wages:
The Average Hourly Earnings for all employees rose by 14 cents to $33.74
Average Hourly Earnings MOM up 0.4% versus estimates of 0.3%
Average Hourly Earnings YOY up 4.4% versus estimates of 4.2%
Unemployment:
The headline Unemployment Rate fell to 3.5% versus estimates of 3.6%
The U6 Underemployment Rate fell from 6.9% to 6.7%
The Labor Force Participation Rate remained at 62.6%
It was one of those weeks we like to ignore but we must face the current facts even though we see it as an over-reaction to the reality the Fed may not be finished, the economy is hot, and the consensus that interest rates will be declining. Not that all of that will be fact, just for now the events this week appear to have upset all the outlooks that had become somewhat gospel. Treasury announced its borrowing needs would be more than what had been expected ($1 trillion), ADP July job growth expected at +185K increased 324K, the Bank of England increased rates, the BofJ said it would keep rates high, Fitch rating firm lowered the US debt rating from AAA to AA+, June JOLTS job openings continued to decline. Investors very spooked. Traders bailed on bets the Fed is done increasing rates. The Treasury yield curve steepened; the shift is unnerving investors as it comes through a painful selloff in longer bonds rather than the rally in shorter debt most expected. The July employment report this morning showed wages still holding, year/year expected to have declined to 4.2% from 4.4% in June, it held at 4.4%. The unemployment rate declined to 3.5% against forecasts of unchanged at 3.6%.
Fitch lowering the debt rating for US treasuries from AAA to AA+ will be overlooked, the rating agency did the same thing in 2008 when the US and global banking crisis occurred (caused by Wall Street greed). Whether AA+ or AAA, US debt is the strongest in the world. Both Warren Buffett and Jamie Dimon chose to ignore it. Treasury is piling high levels of debt; the impact will be higher rates but questioning the safety of US debt seems ridiculous.
The close yesterday for the 10 year note 4.19% up 23 bps higher than last Friday’s close; today with the 10 technically overbought the change for the week cut back to +9 bps increase. MBS prices as volatile as treasuries, yesterday down 65 bps, today ending the week down -9 bps.
Next Week’s Calendar is headlined with inflation data July CPI and PPI. Monday June consumer credit. Tuesday July NFIB small business optimism index, June wholesale inventories, June US trade deficit. Wednesday weekly MBA mortgage applications. Thursday July CPI, weekly jobless claims, July treasury budget. Friday July PPI, August mid-month U. of Michigan consumer sentiment index.
This Week: The 10 year note increased 9 bps, the 2 year note declined 9 bps; FNMA 6.0 30 year coupon lost 9 bps in price. The DJIA +589, NASDAQ -410, S&P -106. Gold increased $19.00, crude oil +$2.25. The dollar index improved 0.37 after declining over the last month. Bitcoin this week -215.
Rate markets over-reacted this week. Today the 10 year note recovered a lot of the increase from Wednesday and Thursday; MBS prices ending the week generally unchanged for the week.
10 year note at 4:00 pm
WE WILL CONTINUE TO KEEP LOCKED WITH POTENTIAL VOLATILITY.
CENY @ 4:00 PM 08.04.2023
10 year note: 4.05% -13 bp
5 year note: 4.14% -15 bp
2 year note: 4.79% -10 bp
30 year bond: 4.20% -10 bp
30 year FNMA 6.0: 100.52 +55 bp (+30 bp from 9:30)
30 year FNMA 5.5: 99.00 +63 bp (+38 bp from 9:30)
30 year GNMA 5.5: 99.06 +56 bp (+34 bp from 9:30)
Dollar/Yuan: $7.1711 +$0.0053
Dollar/Yen: 141.84 -0.69 yen
Dollar/Euro: $1.1007 +$0.0058
Dollar Index: 102.03 -0.52
Gold: $1976.80 +$8.00
Bitcoin: 29,073 -53
Crude Oil: $82.63 +$1.08
DJIA: 35,050 -167
NASDAQ: 13,907 -52
S&P 500: 4476 -25
SOFR Data 01/12: 30-DAY AVERAGE(%): 4.27871, 90-DAY AVERAGE(%): 3.80444, 180-DAY AVERAGE(%): 3.09649, INDEX: 1.06132549
POLSKA
| NAME | VALUE | NET CHANGE | % CHANGE | 1 MONTH | 1 YEAR | TIME (EDT) |
| WIG20:IND
|
2,169.73 | +27.92 | +1.30% | +6.59% | +31.33% | 11:15 AM |
| WIG:IND
|
71,471.63 | +720.53 | +1.02% | +6.39% | +32.69% | 11:15 AM |
| WIG30:IND
|
2,672.22 | +32.68 | +1.24% | +6.84% | +31.87% | 11:15 A |
WALUTY
| CURRENCY | VALUE | CHANGE | NET CHANGE | TIME (EDT) |
| EUR-USD
|
1.1006 | 0.0057 | +0.52% | 4:59 PM |
| USD-JPY
|
141.7600 | -0.8200 | -0.58% | 4:59 PM |
| GBP-USD
|
1.2749 | 0.0040 | +0.31% | 4:59 PM |
| AUD-USD
|
0.6570 | 0.0019 | +0.29% | 4:59 PM |
| USD-CAD
|
1.3379 | 0.0026 | +0.19% | 4:59 PM |
| USD-CHF
|
0.8725 | -0.0017 | -0.19% | 4:59 PM |
| USD-MXN
|
17.0802 | -0.2477 | -1.43% | 4:59 PM |
| USD-CZK
|
22.0189 | -0.1232 | -0.56% | 4:59 PM |
| USD-SKK
|
27.3735 | -0.1406 | -0.51% | 4:59 PM |
| USD-PLN
|
4.0282 | -0.0464 | -1.14% | 4:59 PM |
| USD-HUF
|
354.0300 | -5.4300 | -1.51% | 4:59 PM |
| USD-RUB
|
95.6142 | 1.4563 | +1.55% | 1:27 PM |
POŻYCZKI HIPOTECZNE
| ELITE 21-30 YEAR | ELITE 16-20 YEAR | ||||||
| RATE | 15 DAY | 30 DAY | 45 DAY | RATE | 15 DAY | 30 DAY | 45 DAY |
| 8.625 | -4.682 | -4.632 | -4.502 | 8.625 | -5.241 | -5.191 | -5.061 |
| 8.500 | -4.522 | -4.472 | -4.342 | 8.500 | -5.072 | -5.022 | -4.892 |
| 8.375 | -4.178 | -4.128 | -3.998 | 8.375 | -4.745 | -4.695 | -4.565 |
| 8.250 | -4.069 | -4.019 | -3.889 | 8.250 | -4.668 | -4.618 | -4.488 |
| 8.125 | -4.035 | -3.985 | -3.855 | 8.125 | -4.528 | -4.478 | -4.348 |
| 8.000 | -3.922 | -3.872 | -3.742 | 8.000 | -4.388 | -4.338 | -4.208 |
| 7.875 | -3.550 | -3.500 | -3.370 | 7.875 | -4.032 | -3.982 | -3.852 |
| 7.750 | -3.356 | -3.306 | -3.176 | 7.750 | -3.885 | -3.835 | -3.705 |
| 7.625 | -3.316 | -3.266 | -3.136 | 7.625 | -3.654 | -3.604 | -3.474 |
| 7.500 | -3.205 | -3.155 | -3.025 | 7.500 | -3.489 | -3.439 | -3.309 |
| 7.375 | -2.788 | -2.738 | -2.608 | 7.375 | -3.133 | -3.083 | -2.953 |
| 7.250 | -2.342 | -2.292 | -2.162 | 7.250 | -2.775 | -2.725 | -2.595 |
| 7.125 | -2.292 | -2.242 | -2.112 | 7.125 | -2.530 | -2.480 | -2.350 |
| 6.999 | -2.104 | -2.054 | -1.924 | 6.999 | -2.307 | -2.257 | -2.127 |
| 6.875 | -1.596 | -1.546 | -1.416 | 6.875 | -1.896 | -1.846 | -1.716 |
| 6.750 | -1.173 | -1.123 | -0.993 | 6.750 | -1.613 | -1.563 | -1.433 |
| 6.625 | -1.141 | -1.091 | -0.961 | 6.625 | -1.503 | -1.453 | -1.323 |
| 6.500 | -0.935 | -0.885 | -0.755 | 6.500 | -1.235 | -1.185 | -1.055 |
| 6.375 | -0.370 | -0.320 | -0.190 | 6.375 | -0.785 | -0.735 | -0.605 |
| 6.250 | 0.232 | 0.282 | 0.412 | 6.250 | -0.418 | -0.368 | -0.238 |
| 6.125 | 0.298 | 0.348 | 0.478 | 6.125 | 0.083 | 0.133 | 0.263 |
| 5.999 | 0.659 | 0.709 | 0.839 | 5.999 | 0.409 | 0.459 | 0.589 |
| ELITE 11-15 YEAR | ELITE 8-10 YEAR | ||||||
| RATE | 15 DAY | 30 DAY | 45 DAY | RATE | 15 DAY | 30 DAY | 45 DAY |
| 7.000 | -2.405 | -2.355 | -2.225 | 7.000 | -2.275 | -2.225 | -2.095 |
| 6.875 | -2.196 | -2.146 | -2.016 | 6.875 | -2.074 | -2.024 | -1.894 |
| 6.750 | -1.819 | -1.769 | -1.639 | 6.750 | -1.701 | -1.651 | -1.521 |
| 6.625 | -1.646 | -1.596 | -1.466 | 6.625 | -1.527 | -1.477 | -1.347 |
| 6.500 | -1.609 | -1.559 | -1.429 | 6.500 | -1.479 | -1.429 | -1.299 |
| 6.375 | -1.565 | -1.515 | -1.385 | 6.375 | -1.434 | -1.384 | -1.254 |
| 6.250 | -1.326 | -1.276 | -1.146 | 6.250 | -1.207 | -1.157 | -1.027 |
| 6.125 | -1.044 | -0.994 | -0.864 | 6.125 | -0.925 | -0.875 | -0.745 |
| 6.000 | -0.939 | -0.889 | -0.759 | 6.000 | -0.806 | -0.756 | -0.626 |
| 5.875 | -0.669 | -0.619 | -0.489 | 5.875 | -0.537 | -0.487 | -0.357 |
| 5.750 | -0.243 | -0.193 | -0.063 | 5.750 | -0.124 | -0.074 | 0.056 |
| 5.625 | 0.231 | 0.281 | 0.411 | 5.625 | 0.330 | 0.380 | 0.510 |
| 5.500 | 0.416 | 0.466 | 0.596 | 5.500 | 0.508 | 0.558 | 0.688 |
| 5.375 | 0.739 | 0.789 | 0.919 | 5.375 | 0.799 | 0.849 | 0.979 |
| 5.250 | 1.196 | 1.246 | 1.376 | 5.250 | 1.252 | 1.302 | 1.432 |
| 5.125 | 1.698 | 1.748 | 1.878 | 5.125 | 1.734 | 1.784 | 1.914 |
| 5.000 | 1.824 | 1.874 | 2.004 | 5.000 | 1.845 | 1.895 | 2.025 |
| 4.875 | 2.197 | 2.247 | 2.377 | 4.875 | 2.202 | 2.252 | 2.382 |
| 4.750 | 2.688 | 2.738 | 2.868 | 4.750 | 2.688 | 2.738 | 2.868 |
| 4.625 | 3.178 | 3.228 | 3.358 | 4.625 | 3.158 | 3.208 | 3.338 |
| 4.500 | 3.410 | 3.460 | 3.590 | 4.500 | 3.400 | 3.450 | 3.580 |
| 4.375 | 3.790 | 3.840 | 3.970 | 4.375 | 3.733 | 3.783 | 3.913 |
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