Market Wrap-up
Our benchmark FNMA MBS 6.000 September Coupon is up +21 BPS.
Jobs, Jobs, Jobs: It was SMALL Jobs Friday! You can read the official BLS release here. Here is Bryan’s Tale of the Tape.
Jobs:
August Non Farm Payrolls (NFP) were up only 22K versus estimates of 75K.
July NFP revised upward from 73K to 79K.
June NFP revised downward from 14K down to -13K.
The rolling three month average is now a very low 29K!
Wages:
The National Average Hourly Wage rate moved up by 10 cents to $36.53
Average Hourly Earnings MOM up 0.3% versus estimates of 0.3%.
Average Hourly Earnings YOY up 3.7% versus estimates of 3.7% but lower than July’s pace of 3.9%.
Unemployment:
The Unemployment Rate moved up from 4.2% to 4.3% which was expected.
The U6 Underemployment Rate moved higher, from 7.9% to 8.1%
LaborForce Participation moved up from 62.2% to 62.3%.
The employment situation is slowing, slowing quickly after months of generally optimistic outlooks. The Fed under Powell refusing to capitulate to politics and kept interest rates high. This week’s key reports on the labor markets proved employment is slowing. The unemployment rate announced this morning sent the unemployment rate increased to the highest since 2021. The number of unemployed increased by 148K to 7.384 mil in the period. In turn, the labor force increased by 436 to 170.778 mil, driving the labor force participation rate to increase by 0.1 percentage point from the over two-year low in the previous month to 62.3%. The broader U-6 unemployment rate, which includes discouraged workers and those working part-time for economic reasons, rose to 8.1% from 7.9% in July.
The reaction was swift and deep pushing mortgage rates down today, the biggest one-day decline in more than a year. In less than two weeks (9/17) the FOMC will meet, until this week the expectations were tenuous, but most thought a 25 bp cut would occur, after the soft employment data the betting now is for a 50 bp cut. Still a couple of weeks to go but for now the reaction in rates is a strong bet for 50. The move lower in rates; last Tuesday the bellwether 10 year note yield was 4.30%, now 4.09% with 30 year mortgage rates at 6.30% decisively breaking our 6.50% floor we have been thinking.
We will hear a lot of news next week about the potential of a recession coming. Probably a little too early to fully expect it but it’s out there in some forecasts.
Next week inflation data on Wednesday and Thursday, August CPI and PPI sets up for more volatility. Today’s sharp drop in rates will likely be tested. It isn’t just employment that is key, but inflation and the growing increase in US debt that will impact longer term rates. Next Friday Treasury will release the August budget deficit, at the end of this month the 2025 fiscal year ends. Also bond traders keenly interested in what the Supreme Court will rule about Trump’s tariffs seen as illegal based on a ruling from a federal appeals court.
This Week: 10 year note this week -13 bps, the 2 year note -9 bp. FNMA 6.0 30 year coupon +30 bps, the 5.5 coupon +55 bps. The DJIA -144, NASDAQ +244, S&P +22. Gold increased $133.00, crude oil -$2.01. The dollar index unchanged on the week; Bitcoin +2.812.
Expect interest rates to back up a little on Monday with inflation data on Wednesday and Thursday. Today was a great day for potential mortgagees and re-financers.
PRICES @ 4:00 PM
10 year note: 4.09% -7 bp
5 year note: 3.60% -5 bp
2 year note: 3.53% -7 bp
30 year bond: 4.77% -8 bp
30 year FNMA 5.5: 101.08 +24 bp (-4 bp from 9:30)
30 year FNMA 6.0: 102.47 +13 bp (-3 bp from 9:30)
30 year GNMA 5.5: 101.06 +13 bp (-11 bp from 9:30)
Dollar/Yen: 147.47 -1.01 yen
Dollar/Euro: $1.1718 +$0.0067
Dollar Index: 97.76 -0.59
Gold: $3,647.00 +$40.70
Bitcoin: 111,372 +1565
Crude Oil: $61.95 -$1.54
DJIA: 45,400.86 -220.43
NASDAQ: 21,700.39 -7.31
S&P 500: 6481.50 -20.58
SOFR Data 09/05: 30-DAY AVERAGE(%): 4.35971, 90-DAY AVERAGE(%): 4.35906, 180-DAY AVERAGE(%): 4.37572, INDEX: 1.21038175
Poland
| Name | Value | Net Change | % Change | 1 Month | 1 Year | Time (EDT) |
| WIG20:IND
|
2,805.02 | -23.20 | -0.82% | -2.12% | +18.26% | 11:15 AM |
| WIG:IND
|
105,563.25 | -435.79 | -0.41% | -4.83% | +29.14% | 11:15 AM |
| WIG30:IND
|
3,654.02 | -16.44 | -0.45% | -5.94% | +25.16% | 11:15 AM |
WALUTY
| Currency | Value | Change | Net Change | Time (EDT) |
| EUR-USD
|
1.1717 | 0.0068 | +0.58% | 4:59 PM |
| USD-JPY
|
147.4300 | -1.0600 | -0.71% | 4:59 PM |
| GBP-USD
|
1.3509 | 0.0075 | +0.56% | 4:59 PM |
| AUD-USD
|
0.6557 | 0.0039 | +0.60% | 4:59 PM |
| USD-CAD
|
1.3830 | 0.0012 | +0.09% | 4:59 PM |
| USD-CHF
|
0.7980 | -0.0076 | -0.94% | 4:59 PM |
| USD-MXN
|
18.7159 | -0.0244 | -0.13% | 4:59 PM | |
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| USD-CZK
|
20.8093 | -0.1789 | -0.85% | 4:59 PM | |
| USD-SKK
|
25.7109 | -0.1497 | -0.58% | 4:59 PM | |
| USD-PLN
|
3.6253 | -0.0237 | -0.65% | 4:59 PM | |
| USD-HUF
|
335.3100 | -2.0400 | -0.60% | 4:59 PM | |
| USD-RUB
|
81.5569 | 0.2194 | +0.27% | 12:30 PM | |
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CONVENTIONAL PRODUCTS AND PRICING |
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POŻYCZKI HIPOTECZNE |
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| ELITE 21-30 YEAR | |||
| RATE | 15 DAY | 30 DAY | 45 DAY |
| 7.500 | -4.261 | -4.171 | -4.041 |
| 7.375 | -3.834 | -3.744 | -3.614 |
| 7.250 | -3.378 | -3.288 | -3.158 |
| 7.125 | -3.531 | -3.441 | -3.311 |
| 6.999 | -3.271 | -3.181 | -3.051 |
| 6.875 | -2.804 | -2.714 | -2.584 |
| 6.750 | -2.272 | -2.182 | -2.052 |
| 6.625 | -2.685 | -2.595 | -2.465 |
| 6.500 | -2.284 | -2.194 | -2.064 |
| 6.375 | -1.698 | -1.608 | -1.478 |
| 6.250 | -1.070 | -0.980 | -0.850 |
| 6.125 | -1.468 | -1.378 | -1.248 |
| 5.999 | -1.032 | -0.942 | -0.812 |
| 5.875 | -0.364 | -0.274 | -0.144 |
| ELITE 11-15 YEAR | |||
| RATE | 15 DAY | 30 DAY | 45 DAY |
| 6.500 | -3.772 | -3.682 | -3.552 |
| 6.375 | -3.536 | -3.446 | -3.316 |
| 6.250 | -3.036 | -2.946 | -2.816 |
| 6.125 | -2.975 | -2.885 | -2.755 |
| 6.000 | -2.716 | -2.626 | -2.496 |
| 5.875 | -2.435 | -2.345 | -2.215 |
| 5.750 | -1.954 | -1.864 | -1.734 |
| 5.625 | -2.086 | -1.996 | -1.866 |
| 5.500 | -1.789 | -1.699 | -1.569 |
| 5.375 | -1.448 | -1.358 | -1.228 |
| 5.250 | -0.935 | -0.845 | -0.715 |
| 5.125 | -0.732 | -0.642 | -0.512 |
| 5.000 | -0.345 | -0.255 | -0.125 |
| 4.875 | 0.050 | 0.140 | 0.270 |
| 4.750 | 0.582 | 0.672 | 0.802 |