Import prices jumped higher in November

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Published Date 12/13/2024

Yesterday the 10 year note yield +5 more bps, MBS prices down 25 bps. November producer prices released yesterday higher than estimates. Inflation decline has stalled, CPI on Wednesday was slightly higher than forecasts, +0.3%, yesterday the PPI index was stronger than forecasts, increases in food and shelter pushed the year/year core PPI +3.4% against forecasts at 3.2% and up from 3.1% in October. Yesterday’s soft 30 year bond auction also adding to the increases yesterday and this morning. Until yesterday the consensus with traders was that the Fed would cut rates next Thursday, now with jobless claims the highest in months there is uncertainty about what the Fed may do. Powell saying he isn’t in any hurry to lower rates while Fed governor Christopher Waller saying he wouldn’t object to a cut.

The only data today, November import and export prices. Month/month import prices expected -0.3% increased +0.1%, year/year estimates +1.0% increased 1.3% higher than +0.8% in October. November export prices month/month thought to be -0.1% were 0.0%, year/year +0.8% from -0.1% in October. Agricultural export prices declined 0.4%, as lower prices for soybeans and fruit in November more than offset higher prices for nuts, bakery and confectionery products, and meat. On the other hand, non-agricultural export prices ticked up 0.1%, as higher prices for capital goods and nonagricultural foods more than offset lower prices for consumer.

One component that is contributing to interest rates increasing this week is the relaxation of concerns in the mid-east. Israel and Hamas close to an agreement to end the fighting and release prisoners; and what is seen now as less fear over what will occur after rebels took out the al-Assad regime. How much of the higher rates is associated with cooling we can't codify, the uncertainty over what the Fed will do next week also is playing a large part.

At 9:30 am the DJIA opened +50, NASDAQ +99, S&P +19. 10 year at 9:30 am 4.36%3 bps. FNMA 6.0 30 year coupon at 9:30 am -6 bps from yesterday’s close and -24 bp from 9:30 am yesterday.

Nothing left on the schedule today; now markets waiting for the FOMC next Thursday and/or geopolitical events. Next Tuesday November retail sales is the main data prior to the FOMC next Thursday.

Source: TBWS

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Darren Orshoff is a Marketing and Real Estate professional, licensed Realtor with the California Department of Real Estate DRE#01803671 with WSR Real Estate DRE#01977642.  Darren is also a Certified Mortgage Planner, A Certified Financial Literacy Coach, A Dave Ramsey Trained Financial Coach, A Certified Mortgage Advisor, and while Darren is licensed by the NMLS, he is not originating loans but refers lending transactions to Golden Empire Mortgage, Inc. ("GEM") [NMLS ID No. 2427] licensed by the Department of Financial Protection and Innovation pursuant to the California Residential Mortgage Lending Act, for which he represents as the Corporate Marketing Coordinator.

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