CHM Blog

Overnight the 10 year note, generally quiet, increased 3 bps from yesterday’s close, at 9 am ET back to unchanged. MBS prices at 9 am unchanged. Very little economic data today; banks still in play but each day that passes less concerns as more details are revealed. The initial panic over Silicon Valley Bank and other west coast banks initially seen as widespread contagion with all regional banks, now as details emerge the fears are subsiding. Yesterday bank stocks found some support. Wall Street is warming up to banks again, with their stocks and bonds stabilizing and analysts increasingly emboldened to call a bottom on the selloff. Over the past two weeks, there have been no new bank failures. The main problems occurred in banks supposedly regulated by the San Francisco Fed, it’s clear it didn’t do its job.

Banks made bad decisions looking in hindsight. It isn’t over. The financial fears, money transferring from little to big banks is continuing. The financial media as usual stoking the fires. A lot of talk about the implications at the Fed with banks borrowing at the discount window adds to the angst. Historically, borrowing from the discount window implied there was a problem. In this case it still is considered a concern but so far not anymore banks going down. Some banks made bad decisions a year ago when interest rates were low, buying low yielding treasuries and MBSs, then the Fed ramped up rate increases to cool inflation and the value of the low yielding portfolios fell as interest rate spiked. Not wise enough to sell and take minor losses, some banks road the rates higher accumulating increased unrealized losses as regulators (SF Fed) looked the other way.

The 10 year last Friday broke a very key chart point at 3.40%, declining to 3.29%, it reversed yesterday and ended at 3.54%. An active debate now, some money manager thinking the Fed will curtail its inflation battle and stop or slow rate increases, while others like Black Rock, the country’s largest money manager taking the other side, the Federal Reserve will keep raising interest rates despite traders betting otherwise as fears of a banking crisis convulse markets “We don’t see rate cuts this year – that’s the old playbook when central banks would rush to rescue the economy as recession hit.” “We see a new, more nuanced phase of curbing inflation ahead: less fighting but still no rate cuts.”

Feb US trade deficit expected at -$90B, increased to -$91.6B; month/month imports -2.3%, exports -3.8%. Jan Case/Shiller home price index, -0.2% from -0.5% in Dec; year/year +2.5% from 4.6% and estimated at +3.7%. Jan FHFA house price index expected +0.2% reported at 0.2%.

At 9:30 am the DJIA opened +5, NASDAQ -23, S&P -6. 10 year at 9:30 am +2 bps to 3.56%. FNMA 6.0 30 year coupon at 9:30 am -2 bps from yesterday’s close and -8 bps from 9:30 am yesterday; the 5.5 coupon -2 bps and -10 bps from 9:30 am yesterday.

At 10 am March consumer confidence expected at 101.0 from 102.9, the index increased to 104.2 and Feb revised to 103.4.

At 1 pm Treasury will auction 5 year notes, yesterday’s 2 year auction was sloppy and not well bid.

PRICES @ 10:00 AM

10 year note: 3.55% +1 bp

5 year note: 3.63% +4 bp

2 year note: 4.02% +6 bp

30 year bond: 3.76% unch

Libor Rates: 1 month 4.852%; 3 month 5.143%; 6 month 5.161%; 1 year 5.061% (3/27/23)

30 year FNMA 6.0: @9:30 101.80 -2 bp (-8 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 100.73 -2 bp (-10 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 100.92 unch (-13 bp from 9:30 am yesterday)

Dollar/Yuan: $6.8770 -$0.0081

Dollar/Yen: 131.06 -0.51 yen

Dollar/Euro: $1.0825 +$0.0027

Dollar Index: 102.60 -0.26

Gold: $1963.60 +$9.80

Bitcoin: 27,043 unch

Crude Oil: $72.86 +$0.06

DJIA: 32,468 +36

NASDAQ: 11,692 -76

S&P 500: 3969 -9

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

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.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

Last Friday the bellwether 10 year note broke below 3.40%, the level that had held any improvements going back to Dec. The 10 dropped to 3.29% at mid-day on worries over regional banks, by the close Friday 3.38% down 4 bps. This morning bank shares rallying, Frist republic +27%. Bloomberg reported that US authorities are considering expanding an emergency lending facility that would give the lender more time to boost its balance sheet. First Citizens BancShares Inc. rallied 40% after it agreed to buy all deposits and loans of SVB Financial Group’s Silicon Valley Bank. European equities climbed, with a gauge of bank stocks outperforming. Presently the fears over banks have lessened although traders will remain on edge. Fed officials will be out all week and Friday inflation (PCE), the forecast is for another decline. Fed Minneapolis President Neel Kashkari said over the weekend that bank turmoil had increased the risk of a US recession.

The potential for a recession later this year is gaining momentum with the current problems surfacing from banks that were over-leveraged. That is leading some concern that strong tightening and less cheap credit will push the economy down. Presently all forecasters are flying by the seats of the pants. There is a lot of debt out there, some believing shadow debt and its links to lenders are becoming a major cause for concern. The bank issues that have exploded over the last two weeks created new worry points that won’t be resolved for weeks, regulators scrambling, investors being bounced around by varying opinions and forecasts but presently those don’t carry a lot of water.

At 9:30 am the DJIA opened +260, NASDAQ +40, S&P +24. 10 year at 9:30 am 3.50% +12 bps. FNMA 6.0 30 year coupon -25 bps and -28 bps from 9:30 am Friday, the 5.5 30 year at 9:30 am -39 bps and -44 bp from 9:30 am Friday.

At 1 pm Treasury will auction $42B of 2 year notes.

PRICES @ 10:00 AM

S&P 500: 3994 +23

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

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.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

The Fed did what was expected, increased the FF rate by 25 bps. The Bank of England followed suit, raised its key interest rate by a quarter percentage point this morning adding to the central bank themes of reducing inflation with worrying about the banking system. The Bank of England saying its banking system “remains resilient” and said it may keep on increasing as long as inflation continues to pressure its economy. The rate now the highest since the financial meltdown of 2008. Last week the ECB went 50 bps. There was a meeting of central banks today, the Basel Committee, they said “Years of unprecedentedly low interest rates underpinned the build-up of leverage across household and corporate sectors.” They continued. “As most central banks raise interest rates to combat inflation, borrowers are now facing sharply rising debt service burdens. A broad-based repricing in asset markets could also expose banks to additional risks.”

Weekly jobless claims this morning generally on target, 191K claims down 1K from the prior week. The 4 week average 196.25 from 196.50K

The dollar took a hard hit yesterday on the rate increase sending gold and other commodities higher. Gold on a roll, increased $29.00 yesterday, this morning in early trading up another $22.00. Soft dollar and safety moves underpin the commodity, crude a little lower this morning.

In other news: Goldman Sachs Group strategists saying American households will sell $750B of stocks this year as savings slow and interest rates are high. Households will instead boost allocation to credit and money-market assets. In 2022 households according to GS research held 38% of the total US equity market. US equity mutual funds and exchange traded funds have seen withdrawals of $51 billion this year, while bond funds have received $137 billion, according to Goldman citing high-frequency flow data.

At 9:30 am the DJIA opened +177 after falling 530 yesterday, NASDAQ opened +154, S&P +34. 10 year at 9:30 am 3.48% +3 bp. FNMA 6.0 30 year +13 bps from yesterday and +51 bp from 9:30 am yesterday; the 5.5 coupon +14 bps and +73 bp from 9:30 am yesterday.

At 10 am, a few minutes ago, Feb new home sales expected at 645K from 670K, increased 640K and Jan revised a lot lower, from 670K to 633K.

The 10 still has very strong resistance at 3.40%, no matter what you throw at it, it still has ended any buying when it approaches the resistance. Yesterday the note yield declined 16 bps on the Fed increasing just 25 bps and implied further increases will depend on the banking system and economic conditions. Powell didn’t deviate, nor has any other central bank the last few days, inflation must be brought down. Looking for less wage increases, slower economic growth, and stability in the lending community.

PRICES @ 10:00 AM

S&P 500: 3978 +41

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

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.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

The 10 began 3 bps higher at 3.61%, MBS prices at 8:30 am ET -27 bps (yesterday at the very end of the session MBS prices closed about unchanged after being down 19 bps at 4 pm). Stock indexes in pre-opening trading were unchanged from yesterday.

At 2 pm FOMC is expected to be increased 25 bps, at 2:30 pm Powell will hold his usual press conference, although this one is going to more interesting than usual. What will he say about the banking issues, about any softening of increases and how will the Fed attack inflation going forward? Don’t look for concrete answers; inflation is slowing but well above 3.0% that the Fed has been targeting for a year now. The Fed’s next move will signal whether the fight against inflation trumps fears of financial instability from the banking fallout in recent weeks. While most economists expect a quarter-point interest-rate hike, some say policymakers should pause to shore up financial stability. The swap markets pricing an 80% chance of an increase, the ECB raised last week clearing the way for the Fed. The troubled banks opened lower this morning in the stock market, the angst has slowed the last couple of days.

Beside the policy statement this afternoon the Fed will release its quarterly projections for the economic outlook and new interest rate forecasts, inflation, GDP growth, for the next two years. The forecasts have to taken with that grain of salt now with the present concerns about banks and increasing forecasts of a coming recession. Until now the FOMC hasn’t faced a dual crisis, inflation fighting was the battle, now inflation and a credit crisis is developing as a second battle front. “If you do crisis management correctly, you should have a freer hand to do monetary policy,” said Vincent Reinhart, chief economist at Dreyfus and Mellon and a former senior Fed economist. “To deflect what you think is the right path of monetary policy because you’re worried about financial stability is to admit you’re not doing regulation, supervision, and crisis management correctly. I don’t think the Fed thinks that, in which case they have a free hand” to raise interest rates this week.

Weekly MBA mortgage applications last week +3.0%, purchase apps +2.2%, re-finance apps +4.9%. The prior week +6.5%, purchases +7.3% and re-finances +4.8%.

At 9:30 am the DJIA opened flat, the DJIA +28, NASDAQ -5, S&P -1. 10 year at 9:30 am 3.62% +1 bp. FNMA 6.0 30 year coupon at 9:30 am -8 bps and +13 bp from 9:30 am yesterday. The 5.5 coupon -17 bps and +13 bps from 9:30 am yesterday.

Continue the battle on inflation or hold steady with the present uncertainty about the financial system. The system is fine but going forward credit concerns will likely curb borrowing.

PRICES @ 10:00 AM

S&P 500: 4001 -3

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

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.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

This morning the 10 year began up 9 more bps to 3.59%, MBS prices at 8:30 am ET -33 bps from Yesterday’s 28 bp decline. The FOMC starts today, nothing until tomorrow afternoon. The Fed and other central banks, and overall markets have turned the focus to deposit issues with small and regional banks away from the previous fear of inflation. Last week the ECB increased its base rate by 50 bps, concerned that if it didn’t move as was widely expected it would add to more fears of banking problems. Will the Fed do the same thing? The answer is yes, the Fed will move tomorrow.

Janet Yellen is due to speak about the crisis later today. She will say the government is ready to provide whatever is needed to guarantee deposits. She will say the government stands ready to increase the FDIC insurance if needed at other small or regional banks. She will also say the situation is stabilizing and the banking system remains sound.

The panic that ensued when SVB went under is likely over, although it is possible a couple of more banks may need relief. Not all clear but moving towards more calm.

The wider concern that is gaining momentum is that banks encouraged investors to take on much more risk, there are more debts that exceed what borrowers can pay. Is this the end of the economic boom? What we are reading is an increase in the view that with inflation roaring and lending to tighten sharply the economic outlook is becoming more of a concern, some of that does go to the present bank issues but also to the view developing that future borrowing that floats the economy may be more difficult to achieve. JPMorgan/Chase saying the first quarter will likely be the high point for stocks this year. It is saying their call is predicated on the view that bond yields will move lower along with a likely end of PMI rebound soon, as the impact of past policy tightening starts to take full effect, and the positive offsets (e.g. the cushion of COVID savings and pricing power for corporates) erode. Others believe this is the culmination of the end of stock gains, the final phase beginning with increased volatility.

Regardless of what they the Fed does tomorrow, markets now believe central banks are closer to being done with tightening than it appeared just days ago. For the Fed, traders were betting on another 110 bps of hikes before the troubles at Silicon Valley Bank. As of yesterday, that was just 35 bps.

At 9:30 am the DJIA opened +335, NASDAQ +104, S&P +39. 10 year at 9:30 am 3.58% +9 bps. FNMA 5.5 30 year coupon at 9:30 am -33 bps and -56 bps from 9:30 am yesterday; the 6.0 coupon at 9:30 am -34 bps and -46 bp from 9:30 am yesterday.

At 10 am Feb existing home sales were expected at 4.170 mil from 4.00 mil in Jan, sales reported 4.58 mil, m/m +14.5% and year/year -22.6% from -36.9% in Jan.

At 1 pm this afternoon Treasury will auction $12B of 20 year bonds (19 years, 11 months).

PRICES @ 10:00 AM

S&P 500: 3998 +46

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

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.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

Cities were a family earning 100K goes furthest:

Homeownership has become more difficult for folks who earn below $100k due to elevated mortgage rates and high home prices, and two years of real negative wage growth (inflation running higher than wage growth) forcing many buyers to stay on the sidelines this spring season.

For those with economic mobility and remote work capabilities, a new report via the fintech website SmartAsset shows the top cities where a $100k household income no longer means living from paycheck to paycheck.

SmartAsset analyzed the after-tax income of 76 major cities and then adjusted those figures for the cost of living in each place. What they found is $100k might go the furthest in Memphis.

Here are a few key findings from the report:

• $100K goes furthest in Memphis. The city may be known as the “Home of the Blues,” but Memphis’ low cost of living surely won’t make you sing them. A $100,000 salary is worth more here ($86,444) than in any other city in the study after subtracting taxes and adjusting for the cost of living.

• Texas cities dominate the top 10. Thanks to no state income tax and the low cost of living, the Lone Star State looms large in our study. Seven out of the 10 cities in our top 10 are located in Texas. After deducting taxes and adjusting for the cost of living, a $100,000 salary on average is worth $77,885 across the 10 Texas cities that we analyzed in the study.

• Oklahoma City has the lowest cost of living. A $100,000 goes a long way in the Sooner State’s largest city, considering that the cost of living is only 83.2% of the national average – the lowest out of all 76 cities in the study. A $100,000 salary is worth $84,498 in Oklahoma City after adjusting for the cost of living.

• In New York City, $100K amounts to just $35,791 when you consider taxes and the cost of living. Taxes and cost of living take a big bite out of a $100,000 income in the Big Apple, which ranked last in the analysis. After adjusting for those factors, $100,000 is worth just $35,791.

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market.  This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events.  When MBS pricing goes up, mortgage rates or pricing generally goes down.  When they fall, mortgage pricing goes up.  Tracking these securities real-time is critical.  For more information about the rate market, contact me directly.  I’m among few mortgage professionals who have access to live trading screens during market hours.

Rates Currently Trending: Neutral

Mortgage rates are moving sideways today. The MBS market improved by +64 bps last week. This was enough to decrease mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: Neutral

Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) Bank Run, 2) The Fed and 3) Central Banks.

1) Bank Run: The run on the banking system has been a huge factor in rates over the past two weeks. This week we start off with the news that Credit Suisse will be bought by UBS and supported by financing via the SNB. But will this be enough to stabilize the banking system in Europe? And don't forget we have our own issues in the U.S. with continued fallout from SVB, Signature, First Republic and more.

2) The Fed: We will get our Federal Reserve's latest interest rate decision and policy statement on Wednesday. The bond market is effectively split between the FOMC electing to pause (no rate hike) due to the recent bank mini-crisis or raise 25BPS and signal that they will remain at that level for some time. The answer to the second part of that will come in the form of the FOMC Economic Projections which the bond market will look at for forward guidance on the pace of future hikes and they "terminal" rate which is the max rate before the Fed pivots towards lowering rates in the future.

3) Central Banks: We get key interest rate decisions out of the Bank of England and The Swiss National Bank.

Treasury Sales: We have an important 20 year Bond auction on Tuesday.

This Week's Potential Volatility: High

This morning markets are mostly treading water. Volatility has started a little high but will explode later this week on FOMC.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

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.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

Over the weekend UBS agreed to buy Credit Suisse, injecting $3.2B vowing to reduce the size of the lender by $8B. The holders of Credit Suisse’s riskiest bonds, worth $17B, are set to be wiped out.

This week is about the FOMC, nothing else compares and data is thin except Feb housing data. Markets remain divided about what the Fed should, or not do, when the policy statement is released Wednesday. The balance is fragile, but the slight consensus is the Fed will increase the FF rate by 25 bps. The policy statement is likely to be softened somewhat about what the Fed expects moving forward. Globally key central banks working in tandem over the bank issues, last week the ECB, worried that if it didn’t increase rates as was expected it would further spook markets that central banks were scared, the ECB increased 50 bps. The potential of a pause after this FOMC meeting is increasing, there is a view floating in financial markets that it is the Fed’s fault the banking system considered wobbly now, raising rates too quickly and by too much. Always must have a reason even if it is questionable, poor lending and risk management at some banks doesn’t indict the entire banking system as vulnerable. Credit Suisse’s immediate problem was that it was losing customers, creating a liquidity crisis.

At 9:30 am the DJIA opened +117, NASDAQ -9, S&P +8. 10 year at 9:30 am 3.42% -1 bp. FNMA 5.5 30 year coupon -3 bps and +8 bp from 9:30 am Friday, the 6.0 coupon -2 bp and +16 bp from 9:30 am Friday.

Nothing else scheduled today. Waiting for the Fed’s assessment of the present banking concerns that Powell will try and make clear on Wednesday afternoon.

If the 10 year note holds its key resistance at 3.40%. After trading flat, by 10 am MBS prices under pressure, down 20 bps from Friday. The 10 year is edging higher at 10 am, 3.47% +4 bp.

PRICES @ 10:00 AM

S&P 500: 3940 +24

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

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.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

Concerns over bank issues slowed yesterday, some key Wall Street firms suggesting the run to safety in treasuries may have run its course. MBS prices began the day +14 bps, yesterday -22 bps. The more sensitive 2 year note this morning in early activity down 14 bps after yesterday’s 30 bp increase.

Yesterday stock indexes improved on relief after hard selling recently, this morning in futures trading the indexes, the DJIA -280.

The most recent bank that roiled markets, Credit Suisse, improved yesterday, but today selling reemerged as fear continues. The stock of First Republic, after getting a $30B lifeline from Wall Street big banks, declined 17% in pre-open trading this morning, down about 60% this week. Most other regional banks were lower prior to the 9:30 am ET open, with PacWest Bancorp falling 5.6% in premarket trading, Western Alliance Bancorp dropping 2.5% and KeyCorp down 1.5%. Meanwhile, the SPDR S&P Regional Banking ETF fell as much as 2.6%. Some banks turned to the Fed’s discount window yesterday, shoring up overnight reserves; borrowing at the window implies the situation in the banking system remains uncertain. Borrowing from the window is considered evidence of potential problems, it is the last place to go and usually puts bank examiners on high alert.

At 9:15 am Feb industrial production and capacity utilization, production thought to be +0.4%, cap utilization at 78.5% from 78.3%; production unchanged from Jan; capacity declined to 78.0%.

At 9:30 am the DJIA opened -120, NASDAQ -11, S&P -6. 10 year 3.47% -11 bps. 10 note 3.46% -12 bp. FNMA 5.5 30 year coupon at 9:30 am +31 bps from yesterday and -5 bps from 9:30 am yesterday.

At 10 am Feb leading economic indicators. Expected down 0.2%, declined 0.3%.

The FOMC next Wednesday and Jerome Powell’s press conference will be the focus now, adding to the uncertainty existing in the banking sector. Expect a 25 bp increase, like the ECB yesterday, continuing to march forward fighting inflation implies the central banks are not panicking. By next Wednesday much of the present uncertainty will have settled as more information on banks unfolds.

PRICES @ 10:10 AM

S&P 500: 3957 -3

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

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.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

Volatility overnight slowed compared to earlier this week, yesterday the key 10 year dropped to 3.40%, the strong technical resistance level, at the end of the session the 10 closed at 3.47%. Overnight the high rate 3.52%, at 8 am ET 3.44%. Worries continue but are fading a little on news Credit Suisse found a savior at the Swiss National Bank that injected $54B and a pledge to buy back $3.2B of debt. An ongoing situation but the huge fears that grabbed the financial worlds this week appears to be easing somewhat.

At 8:30 am this morning: weekly jobless claims were expected at 205K from 212k, claims fell to 192K down 20K; 4 week average 196.50 from 197.25K. Feb housing starts and permits much stronger than forecasts, annual starts expected at 1.315 mil increased 1.450 mil; annual permits were thought to be 1.340 mil but increased 1.524 mil. The Philadelphia Fed’s manufacturing index was thought to be -15.8 from -24.3 in Feb, as reported the index -23.2.

Also, at 8:30 am Feb import and export prices. Imports were expected -0.2% reported -0.1% m/m, year/year -1.1% against +0.2%. Export prices thought to be -0.3% were +0.2% m/m, year/year -0.8% from +2.2% in Jan.

The ECB surprised by increasing its key rate by 50 bps. JPMorgan Chase & Co. and TD Securities Inc. who say it’s time to close out long positions in Treasuries as the Federal Reserve may still tighten policy next week. “We think the Fed isn’t done and we continue to look for another 25-basis point hike next week, and a final hike in May,” JPMorgan analysts led by Jay Barry wrote in a note to clients. “We suggest taking profits on the remaining portion of a long five-year note trade from 4.21% entry at the market.” TD Securities closed a 10-year Treasuries trade initiated in February when the yield was at 3.77%, after the rate dropped through 3.46% this week according to a report on Bloomberg.

At 9:30 am the DJIA opened -210, NASDAQ -57, S&P -24. 10 year at 9:30 am at its chart resistance at 3.40%. FNMA 6.0 30 year coupon at 9:30 am +9 bps and +3 bps from 9:30 am yesterday, the 5.5 coupon +14 bps and +11 bps from 9:30 am yesterday. By 10 am 3.40% held again, MBS prices at 10 am -8 bps, the 10 3.43% -3 bps.

PRICES @ 10:00 AM

10 yr. note: 3.43% -4 bp

5 yr. note: 3.53% -3 bp

2 Yr. note: 3.96% +8 bp

30 yr. bond: 3.64% -1 bp

Libor Rates: 1 mo. 4.709%; 3 mo. 4.907%; 6 mo. 4.834%; 1 yr. 4.728% (03/15/23)

30 yr. FNMA 6.0: @9:30 am 101.83 +9 bp (+3 bp from 9:30 am Friday)

30 yr. FNMA 5.5: @9:30 am 100.83 +14 bp (+11 bp from 9:30 am Friday)

30 yr. GNMA 5.5: @9:30 am 101.03 +6 bp (+20 bp from 9:30 am Friday)

Dollar/Yuan: $6.8981 -$0.0088

Dollar/Yen: 132.36 -1.07 yen

Dollar/Euro: $1.00611 +$0.0033

Dollar Index: 104.47 +0.18

Gold: $1931.40 +$0.10

Bitcoin: 24,870 +499

Crude Oil: $66.75 -$0.86

DJIA: 31,705 -169

NASDAQ: 11,452 +19

S&P 500: 3885 -8

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

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.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.