Published Date 1/22/2024
Last week the 10 year note +19 bps, 2 year +22 bps. The news coming out of Davos last week cooled the increasing view the Fed and other key central banks were preparing to lower rates as early as March with some wild speculation the Fed may cut rates six times this year. Every comment from a central banker including Fed officials took wind out of those “sure” beliefs, pushing rates higher. This morning with little news over the weekend rates began better, at 8:30 am ET the 10 year note yield was down 5 bps to 4.08%, the 2 year note however was unchanged early. That the 2 didn’t improve, the most sensitive to rate cuts, suggests the mood remains cautious after all the comments last week from central bankers.
This week all the key data comes on Thursday and Friday, not much between now and then except Treasury auctions. There was very little news over the weekend.
At 9:30 am the DJIA opened stronger after the S&P 500 index finally made a new high from two years ago after struggling for the last two weeks. The DJIA opened +87, NASDAQ +81, S&P +16. 10 year at 9:30 am 4.09% -4 bps. FNMA 6.0 30 year coupon at 9:30 am +12 bps from Friday’s close and +9 bp from 9:30 am Friday.
The next key inflation report is Friday with Powell’s favorite, personal consumption expenditures (PCE) the focus on the core (ex-food and energy) month/month expected +0.2% from +0.1% in November but year/year +3.0% down from 3.2%. The consensus that the US economy will at worst see a soft landing with some expecting growth to continue, equity markets in the US bullish while in China its economy is faltering. The Middle East tensions still out there but markets don’t believe President Biden will take any significant action.
The only data today, and it isn’t a market-moving report, at 10 am December leading economic indicators, expected at -0.3%, reported at -0.1% from -0.5% in November.
Expecting a tight trading range until Thursday and Friday data is released. Financial markets presently focused on what the Fed may do at the March FOMC meeting, in the meantime the FOMC meeting next Tuesday and Wednesday. No comments from Fed officials this week, the self-imposed silence a week prior to a FOMC meeting. Looking for the 10 year note and MBS prices to remain close to the current levels through the rest of the day.
This Week’s Economic Calendar:
Monday,
10 am December leading economic indicators (-0.3%, as reported -0.1%)
Tuesday,
1 pm $60B 2 year note auction
Wednesday,
7 am weekly MBA mortgage applications
1 pm $61B 5 year note auction
Thursday,
8:30 am weekly jobless claims 200K from 187K)
Advance Q4 GDP (+2.0% from +4.9% in Q3 2023)
December durable goods orders (+1.0%, ex transportation orders +0.2%, core capital goods -0.2%)
December US trade deficit (-$88.5B)
10 am December new home sales (650K from 590K)
1 pm $41B 7 year note auction
Friday,
8:30 am personal income and spending (income +0.3%, spending +0.4%)
PCE month/month inflation +0.2% from -0.1%, year/year +2.7% from 2.6%); core PCE month/month +0.2% from +0.1%, year/year +3.0% from 3.2%)
10 am December pending home sales (+1.3% from 0.0% in November)
Source: TBWS
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.
NMLS: 51519
Millenium Home Mortgage LLC
1719 Route 10 East, Suite 206, Parsippany NJ
Company NMLS: 51519
Office: 973-402-9112
Email: connie@mhmlender.com
NMLS: 51519
5/14/2024
Homeowner. It’s a word not as many members of younger generations can slap on th... view more
5/14/2024
The April headline Producer Price Index appeared to be much hotter than expected... view more
5/13/2024
The drive to bring down-home prices is not going well...... view more
5/13/2024
Unlike last week, this week is packed with economic releases. Trading was choppy... view more
5/10/2024
The inherited home. Sometimes it’s in a great neighborhood, but often it’s not a... view more
5/8/2024
Anyone can paint a house green, but how many people have a greenhouse on their p... view more
5/7/2024
It may just be one of the best-kept secrets around when it comes to renovating o... view more
5/7/2024
The March Consumer Credit report will hit at 3 pm and is expected to increase by... view more
5/6/2024
What goes up must come down? High in the sky home prices now seem like a hot air... view more
5/6/2024
Rates began somewhat better this morning after Friday’s decline in yields and MB... view more