Markets that are impacted by the US/Iran conflict started stronger today, crude oil price lower, rates better, stock indexes boosted. A 10 day cease fire between Israel and Lebanon is helping support the view the end maybe near.
At 9:30 am the DJIA opened +637, NASDAQ +212, S&P +51, 10 year at 9:30 am 4.25% -7 bp. FNMA 5.5 30 year coupon at 9:30 am +15 bps from yesterday’s close and +10 bps from 9:30 am yesterday.
The only issue today, how markets will trade with the assumption a deal with Iran is very close.
PRICES @ 10:00 AM
10 year note: 4.25% -7 bp
5 year note: 3.85% -7 bp
2 year note: 3.72% -6 bp
30 year bond: 4.89% -4 bp
30 year FNMA 5.5: @9:30 am 101.12 +15 bp (+10 bp from 9:30 am yesterday)
30 year FNMA 6.0: @9:30 am 102.40 +10 bp (+2 bp from 9:30 am yesterday)
30 year GNMA 5.5: @9:30 am 101.01 +11 bp (-1 bp from 9:30 am yesterday)
Dollar/Yen: 158.17 -0.99 yen
Dollar/Euro: $1.1839 +$0.0055
Dollar Index: 97.74 -0.48
Gold: $4,885.90 +$77.60
Bitcoin: 76,909 +1532
Crude Oil: $83.78 -$10.91
DJIA: 49,391 +742
NASDAQ: 24,353 +250
S&P 500: 7104 +63
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.
Prior to 8:30 am ET treasury markets were unchanged from yesterday. At 8:30 am weekly jobless claims for last week, expected at 215K, dropped to 207K, -11K from the previous week, which was the lowest since early February. The 4-week moving average which reduces week-to-week volatility was 209,750, an increase of 500 from the previous week's revised average of 209.25K. Continuing claims increased to 1.818 million +31K from the prior week. Lower weekly claims, higher continuing claims keeps traders uneasy about employment one way or the other.
The Philadelphia Fed Manufacturing Index climbed to 26.7 in April from 18.1 in the prior month, hitting its strongest level since January 2025. The data surprised analysts on the upside, comfortably exceeding expectations for a drop to 10. It isn’t a market-mover.
New York Fed President John Williams expressing concern about the Iran war’s impact on the economy, saying it already has shown signs of hiking prices and slowing growth. “Assuming energy supply disruptions ease reasonably soon, energy prices should come down, and these effects should partially reverse later this year,” Williams said. “However, the conflict could also result in a large supply shock with pronounced effects that simultaneously raises inflation — through a surge in intermediate costs and commodity prices — and dampens economic activity. This has begun to play out already.” The next FOMC meeting, April 28 and 29, no change in rates at the meeting and likely no cuts this year.
Cautious optimism about a deal with Iran continues, the US is blocking Iran imports and exports through the Strait.
10 year note: 4.27% -1 bp
5 year note: 3.89% -1 bp
2 year note: 3.77% unch
30 year bond: 4.89% -1 bp
30 year FNMA 5.5: @9:30 am 101.02 +4 bp (+4 bp from 9:30 am yesterday)
30 year FNMA 6.0: @9:30 am 102.38 +8 bp (++9 bp from 9:30 am yesterday)
30 year GNMA 5.5: @9:30 am 101.12 +9 bp (+5 bp from 9:30 am yesterday)
Dollar/Yen: 159.05 +0.07 yen
Dollar/Euro: $1.1780 -$0.0020
Dollar Index: 98.18 +0.13
Gold: $4,839.40 +$15.80
Bitcoin: 74,633 -418
Crude Oil: $92.80 +$1.47
DJIA: 48,432 -31
NASDAQ: 23,915 -101
S&P 500: 7013 -10
Since last Thursday the 10 year note has declined 10 bps, this morning the note opened 2 bps higher. After what initially looked like a failed negotiation with Iran markets are more positive. The S&P recovered all of its losses since the conflict began, crude oil has declined and crude oil futures are lower than current oil prices.
Last week MBA reported mortgage applications increased 1.8% from the prior week. Refinancing applications jumped 5.1% while those to purchase a home fell 1%.
March import prices thought to be +2.1% month/month increased just 0.8%, year/year +2.1% from 1.3% last month. Month/month export prices were expected +1.7%, reported +1.6%, year/year +5.6% from +3.5% in February.
April NY Empire State manufacturing index increased 11.0 from -0.2% in March, the highest index in five months.
At 10 am ET April NAHB housing market index.
At 2 pm the Fed’s Beige Book, 12 Fed districts report the details in each district, usually not a market mover.
10 year note: 4.27% +2 bp
5 year note: 3.89% +2 bp
2 year note: 3.76% +1 bp
30 year bond: 4.88% +2 bp
30 year FNMA 5.5: @9:30 am 100.98 -5 bps (+5 bp from 9:30 am yesterday)
30 year FNMA 6.0: @9:30 am 102.29 -5 bp (+4 bp from 9:30 am yesterday)
30 year GNMA 5.5: @9:30 am 101.07 -1 bp (+12 bp from 9:30 am yesterday)
Dollar/Yen: 159.08 +0.29 yen
Dollar/Euro: $1.1785 -$0.0012
Dollar Index: 98.15 +0.02
Gold: $4,847.30 -$2.80
Bitcoin: 73,899 -392
Crude Oil: $90.54 -$0.74
DJIA: 48,448 -88
NASDAQ: 23,754 +115
S&P 500: 6979 +12
Yesterday stocks increased and crude oil inched higher but still lower than early yesterday morning. There is a little more hope that Iran will make a deal that satisfies the US. There is still the cease fire in affect that will go until a week from Thursday, Apr 22nd. The US and Iran are weighing further negotiations to extend a ceasefire, with the objective of holding fresh talks before the truce expires next week.
This morning wholesale prices for March, PPI, producer prices increased by 0.5% month-over-month in March, matching February’s growth but falling short of market expectations of 1.1%. The rise was primarily driven by a 1.6% surge in goods prices, the largest increase since August 2023, fueled by an 8.5% jump in energy costs. Year/year overall PPI +4.0% against forecasts of 4.7%, the largest increase since February 2023. It is all about the cost of energy increasing, ex food and energy PPI month/month thought to be +0.5% increased +0.1%, year/year ex food and energy thought to be +4.2% increased just 3.8%.
The price of oil this morning $95.10, -$3.98, the price of oil for June delivery in the futures markets, $90.80. That the price is lower out in the future is backwardation suggesting oil traders believe the price of oil will decline and is founded on the belief the tensions between the US and Iran will lessen.
10 year note: 4.30% unch
5 year note: 3.92% unch
2 year note: 3.79% +1 bp
30 year bond: 4.90% unch
30 year FNMA 5.5: @9:30 am 100.93 +2 bp (+16 bp from 9:30 am yesterday)
30 year FNMA 6.0: @9:30 am 102.25 -3 bp (+9 bp from 9:30 am yesterday)
30 year GNMA 5.5: @9:30 am 100.95 -11 bp (+13 bp from 9:30 am yesterday)
Dollar/Yen: 158.80 -0.65 yen
Dollar/Euro: $1.1802 +$0.0041
Dollar Index: 98.04 -0.32
Gold: $4,815.10 +$47.80
Bitcoin: 75,258 +1878
Crude Oil: $95.10 -$3.98
DJIA: 48,370 +151
NASDAQ: 23,396 +212
S&P 500: 6920 +33
US treasuries overnight increased but this morning back to Friday’s levels.
Inflation on the rise, consumer sentiment lower. March CPI Friday month/month increased 0.9% as expected and up from 0.3% in February, the huge jump due to increased gasoline prices. The University of Michigan consumer sentiment index plummeted to 50.8 in April (preliminary), marking a 10.9% drop from March and the lowest level since June 2022.
At 9:30 am the DJIA opened -252 after being down 600 points in futures markets, NASDAQ -55, S&P -15. 10 year note at 9:30 am 4.32% unchanged from Friday, at its highest overnight the note increased to 4.36%. FNMA 5.5 30 year coupon at 9:30 am -1 bp from Friday’s close and -8 bps from 9:30 am Friday.
10 year note: 4.31% -1 bp
5 year note: 3.93% -2 bp
2 year note: 3.80% -1 bp
30 year bond: 4.91% -1 bp
30 year FNMA 5.5: @9:30 am 100.77 -1 bp (-8 bp from 9:30 am Friday)
30 year FNMA 6.0: @9:30 am 102.16 -3 bp (-3 bp from 9:30 am Friday)
30 year GNMA 5.5: @9:30 am 100.82 -5 bp (-10 bp from 9:30 am Friday)
Dollar/Yen: 159.71 +0.42 yen
Dollar/Euro: $1.1706 -$0.0019
Dollar Index: 98.87 +0.22
Gold: $4,750.10 -$37.30
Bitcoin: 71,043 -82
Crude Oil: $103.27 +$6.40
DJIA: 47,771 -146
NASDAQ: 22,950 +47
S&P 500: 6821 +4
March CPI (consumer price index) at 8:30 am ET was slightly less than estimates; overall month/month +0.9% as expected, year/year +3.3%, the highest since May 2024, against estimates of 3.4%; core CPI, ex food and energy, month/month +0.2% with forecasts of +0.3%, year/year +2.6%, estimates +2.7%.
Yesterday markets got February PCE inflation data. Inflation based on that data didn’t increase much as it was prior to the beginning of the Iran conflict. The March data is data during the start of hostilities and also didn’t increase that much.
At 10 am the mid-month University of Michigan consumer sentiment index, expected at 52.0 from 53.3 at the end of March. The consumer sentiment index plummeted to 50.8 in April (preliminary), marking a 10.9% drop from March and the lowest level since June 2022. Driven by spiking inflation fears, the index marked a 34.2% year-over-year decline, reflecting severe anxiety over rising prices and reduced purchasing power, creating the second-lowest reading in the survey's history.
10 year note: 4.31% +2 bp
5 year note: 3.93% +3 bp
2 year note: 3.80% +3 bp
30 year bond: 4.91% +2 bp
30 year FNMA 5.5: @9:30 am 100.85 +3 bp (+11 bp from 9:30 am yesterday)
30 year FNMA 6.0: @9:30 am 102.19 +4 bp (+2 bp from 9:30 am yesterday)
30 year GNMA 5.5: @9:30 am 100.92 +1 bp (+1 bp from 9:30 am yesterday)
Dollar/Yen: 159.12 +0.15 yen
Dollar/Euro: $1.1730 +$0.0031
Dollar Index: 98.63 -0.19
Gold: $4,793.50-$24.50
Bitcoin: 71,965 -163
Crude Oil: $98.56 +$0.69
DJIA: 48,006 -179
NASDAQ: 22,943 +122
S&P 500: 6832 +7
The headline data this morning, February PCE, the Fed’s primary measure of inflation. Month/month overall in line with estimates, month/month core where the Fed looks, expected +0.3% increased to +0.4%. Personal income month/month -0.1%, spending +0.5% in line with forecasts. The data is from February prior to the conflict with Iran.
The final GDP growth in Q4 2025 reported weaker than forecasts at 0.5% with estimates of +0.7%. Once again, its old data, the first release was three months ago had GDP +1.4%, lower revisions on the second and now the final report.
Weekly jobless claims expected at 212K, increased to 219K, +16K from the prior week, the number remained firmly below the averages from the second half of 2025. Continuing claims, which are a proxy for outstanding unemployment in the country, dropped by 38,000 to 1,794,000, the lowest level since May 2024. The latest release continued to reflect a robust labor market with low firing and low net firing holding against signals of a softer pace of labor force growth. Continuing claims, a proxy for outstanding unemployment, dropped by 38K to 1,794 million, the lowest in nearly two years. The latest release continues to reflect a firm labor market with low net firing.
At 1 pm Treasury will sell $22B of 30 year bonds, yesterday’s 10 year auction met with soft demand.
The focus remains on the Iran conflict, already there is dissention on the cease fire, Iran accusing of Israel of attacking Lebanon. Abu Dhabi’s oil minister said, “This moment requires clarity,” said Sultan Ahmed Al Jaber in a social media post. “So let’s be clear: the Strait of Hormuz is not open. Access is being restricted, conditioned and controlled.” Iran has made clear that ships must obtain its permission to pass through the Strait, Al Jaber said. “That is not freedom of navigation. That is coercion,” the ADNOC chief said.
Nothing left on the schedule today except the Treasury auction and that won’t move markets. News on the cease fire will dominate.
10 year note: 4.31% +1 bp
5 year note: 3.93% unch
2 year note: 3.80% unch
30 year FNMA 5.5: @9:30 am 100.74 -1 bp (-30 bp from 9:30 am yesterday)
30 year FNMA 6.0: @9:30 am 102.17 +8 bp (-11 bp from 9:30 am yesterday)
30 year GNMA 5.5: @9:30 am 100.91 -12 bp (-12 bp from 9:30 am yesterday)
Dollar/Yen: 159.03 +0.45 yen
Dollar/Euro: $1.1683 +$0.0022
Dollar Index: 98.86 -0.28
Gold: $4,799.50 +$22.30
Bitcoin: 70,882 -442
Crude Oil: $99.34 +$4.93
DJIA: 47,865 -45
NASDAQ: 22,5777 -52
S&P 500: 6775 -7
At 6:30 pm ET yesterday a cease fire deal was reached with the Iranians. The cease fire adds another two weeks to the negotiations.
The reactions this morning are extensive, the 10 year note at 8:30 am 4.24% -6 bps, MBS price +36 bp from yesterday, futures trading in stock indexes, the DJIA +1,190, NASDAQ +804, S&P +158. Crude oil price -$18.00, gold +$116.00, the US dollar weakening.
The only data today, weekly MBA mortgage applications for last week. Mortgage applications eased by 0.8% from the previous week on the period ending April 3rd, extending the cumulative 28.5% plunge from the three previous weeks, even with a slight decline last week. Applications for a contract to refinance a mortgage, which are more sensitive, fell by 3.0%. In turn, applications for a mortgage to buy a new home inched higher by 1% but fell 7% from the previous year, the first annual decline in over a year.
At 1 pm the Treasury will auction $39B of 10 year notes, yesterday’s 3 year auction was met with strong demand, today’s 10 will likely see strong bidding also.
At 2 pm the minutes from the March FOMC meeting, with the Iran conflict on center stage the minutes won’t mean much.
10 year note: 4.25% -6 bp
5 year note: 3.89% -5 bp
2 year note: 3.76% -4 bp
30 year bond: 4.86% -1 bp
30 year FNMA 5.5: @9:30 am 101.34 +37 bp (+29 bp from 9:30 am yesterday)
30 year FNMA 6.0: @9:30 am 102.38 +17 bp (+18 bp from 9:30 am yesterday)
30 year GNMA 5.5: @9:30 am 101.03 +18 bp (+25 bp from 9:30 am yesterday)
Dollar/Yen: 158.28 -1.34 yen
Dollar/Euro: $1.1690 +$0.0092
Dollar Index: 98.72 -1.13
Gold: $4,802.50 +$118.80
Bitcoin: 71,821 +2807
Crude Oil: $94.22 -$18.73
DJIA: 47,874 +1289
NASDAQ: 22,655 +634
S&P 500: 6767 +152
At 8:30 am ET February durable goods orders; new orders expected -0.2% declined -1.4%, ex-transportation orders expected +0.7% increased +0.8%, core capital goods +0.6%, better than +0.3% estimates.
At 9:30 am the DJIA opened -120, NASDAQ -94, S&P -20. 10 year note at 9:30 am -1 bp to 4.33%. FNMA 5.5 30 year coupon at 10 am -11 from yesterday and -8 bps from 9:30 am yesterday.
At 1 pm Treasury will auction $58B of 3 year notes, recent Treasury borrowing has met with tepid demand.
10 year note: 4.35% +1 bp
5 year note: 3.99% unch
2 year note: 3.86% unch
30 year bond: 4.92% +3 bp
30 year FNMA 5.5: @9:30 am 100.55 -11 bp (-8 bp from 9:30 am yesterday)
30 year FNMA 6.0: @9:30 am 102.08 -4 bp (-2 bp from 9:30 am yesterday)
30 year GNMA 5.5: @9:30 am 100.78 -4 bp (-3 bp from 9:30 am yesterday)
Dollar/Yen: 159.86 +0.18 yen
Dollar/Euro: $1.1558 +$0.0017
Dollar Index: 99.97 -0.01
Gold: $4,663.20 -$21.50
Bitcoin: 68,396 -1359
Crude Oil: $116.09 +$3.68
DJIA: 46,396 -274
NASDAQ: 21,783 -213
S&P 500: 6565 -46
Neutral
Good news with an asterisk
Some news has a silver lining if you squint hard enough. March's jobs report was better than expected, but the real story is a little more complicated than the headline suggests.
According to Realtor.com’s Jake Krimmel, the Bureau of Labor Statistics reported 178,000 nonfarm payrolls added in March, with unemployment ticking down to 4.3%. On the surface, that sounds good. But February was quietly revised to a net loss of 133,000 jobs, making last month even worse than we thought. Strip away the noise and the 3-month rolling average settles in at just +68,000 — not exactly booming.
Still, the Fed can exhale a little. The stagflation scenario that had been building momentum is looking slightly less scary. Wage growth came in soft at 3.5% year over year, which doesn't do much for your grocery bill, but it does give the Fed room to stay focused on inflation without rushing to cut rates. Translation: don't expect any dramatic moves from the Fed anytime soon. They'll wait and watch.
For housing, March's survey data was largely collected before the heaviest trade war turbulence hit, so some caution is still warranted. The spring market has weathered a rough patch — mortgage rates have climbed for 5 straight weeks, creating a real headwind. But pending sales and new listings are still showing year-over-year gains, which means the market hasn't rolled over.
One bright spot Krimmel flags: construction added 26,000 jobs in March, a potential early signal that housing supply could keep moving in the right direction as the season heats up.
The fundamental challenges — affordability, uncertainty — haven't gone anywhere. But given the volatility of the past month, as Krimmel puts it, "we'll take this small win."
Realtor, TBWS
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 getting some support today. The MBS market improved by +54 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
These are the three things that can have the greatest impact on rates this week. 1) Geopolitical, 2) Inflation and 3) Services.
1) Geopolitical: This category will continue to dominate long bond trades. On the radar is a possible truce, higher escalation, the Straight of Hormuz, oil prices, etc.
2) Inflation: We get a lot of inflation data this week with PCE and CPI. PCE will get more weight as the Fed's key measure of inflation, Core PCE will get on Thursday.
3) Services: The ISM Non Manufacturing PMI (services) kicks off our week. This represents 2/3 of our economic engine. ISM services was reported at 54 versus expectations of 55 while Prices paid rose from 63 to 70.7.
Treasury Auction: We have a big week for longer term Treasuries.
04/07 3 year note.
04/08 10 year note.
04/09 30 year bond.
This Week's Potential Volatility: High
This morning markets continue to see some support on geopolitical concerns. Volatility has started at moderate levels but could become high at any time this week.
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.