Market Snapshot August 13, 2019

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Good Morning on this Terrific Tuesday,

 

CPI out maybe a bit stronger than expected, a bit. Bigger news is that the White House is backing off on some tariffs. Apple is surging on the news (I am sure that’s just coincidental). Items removed from tariff list included cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing. The Dow is up 385 and Bond yields increasing this morning as well. The 10-year yield is 4 bps higher at 1.69%, returning to Friday level and lowest since early-October 2016. Mortgage bonds are dancing on both sides of unchanged so let’s call that flat for now.

 

Futures have priced 88% probability of 25 bps Fed rate reduction in September and 66% of another 25 bps in October.

 

And this is just starting to read: Mortgage rates have never been lower in Denmark. In fact, they’re now negative. Denmark’s Jyske Bank, is now offering a 10-year fixed-rate mortgage at negative 0.5%. Additionally, Finland-based Nordea Bank announced Wednesday that it will offer a 20-year fixed-rate mortgage in Denmark that charges no interest, and the bank is preparing for the possibility of home loans up to 30 years in duration having negative rates. Currently, the rates on 30-year fixed mortgages average just 0.5% in Denmark.

 

Fun times.

 

Make today great!