April 18th, 2022 9:47 AM by Richard Sardella MLO.100007700/NMLS 233568
After last Thursday’s strong selling in the rate markets this morning the 10 and MBSs opened unchanged. Last Thursday the 10 increased to a new high in this straight up increase, to 2.83%, MBS prices down 80 bps. Last week was a psyco-parinoid week; one day the inflation rate was thought to be flattening when March CPI was a 0.1 lower than forecasts even though it was higher than in Feb. The next day media news was that the Fed may not increase the FF by only 0.25% instead of 0.50% that is expected. Prices and yields swung back and forth as sentiment drove traders in circles. The 10 yr. note technically oversold generating all the wild speculations. On Thursday with a long weekend ahead it was back to reality with very strong selling of treasuries and MBSs. By 9 am ET MBSs were improving, +20 bps as volatility continues. Treasury futures slipped last evening, continuing their retreat into the Asian session. The market reached lows just after midnight, followed by a rebound that erased a portion of the losses.
The May FOMC meeting is two weeks away, expect daily comments about a 50 bp or 25 bp increase in the FF rate to dominate the news. This morning’s news: U.S. equity futures fell, and Treasuries steadied on Monday as investors weighed the prospect of faster policy tightening by the Federal Reserve. That will be at the forefront this week along with corporate earnings. The earnings usually have no major impact for interest rates. There are three Fed officials speaking this week; James Bullard, St. Louis Fed, the Fed’s leading voice for a 50 bp increase at 4 pm today. Tomorrow and Wednesday Charles Evens, Chicago. Mary Daily, San Francisco Fed on Wednesday. After Wednesday there will be no more Fed speakers until after the FOMC meeting, the week before the meeting Fed officials take a pause.
At 9:30 am, the DJIA opened +44, NASDAQ -11, S&P +2. 10 yr. 2.82% -1 bp. FNMA 4.5 30 yr. coupon +28 bps from Thursday’s close and -20 bps from 9:30 am Thursday.
At 10 am, April NAHB housing market index was expected at 78.0 from 79.0 in March, the index fell to 77.0.
There isn’t any key data this week except housing news; March housing starts and permits tomorrow and existing home sales on Wednesday.
The war continues with Russia re-grouping and ready to try again on Kyiv. It is clear that the war is going to last much longer than what most were expecting. All eyes focused on it, but so far, no noticeable panic in any markets, just keeping volatility high with no real trends attributed to it.
PRICES @ 10:00 AM
10 yr note: 2.83 % unch
5 yr note: 2.77% -2 bp
2 Yr note: 2.48% +3 bp
30 yr bond: 2.93% +1 bp
Libor Rates: 1 mo 0.594%; 3 mo 1.063%; 6 mo 1.557%; 1 yr 2.222% (4/14/22)
30 yr FNMA 4.0: 100.03 +4 bp (+31 bp from 9:30 am Thursday)
30 yr FNMA 4.5: 101.94 +28 bp (+20 bp from 9:30 am Thursday)
30 yr GNMA 4.0: 101.05 +3 bp (+23 bp from 9:30 am Thursday)
Dollar/Yuan: $6.3651 -$0.0061
Dollar/Yen: 126.58 +0.13 yen
Dollar/Euro: $1.0802 -$0.0011
Dollar Index: 100.56 +0.23
Gold: $1996.10 +$21.20
Bitcoin: 39,444 -825
Crude Oil: $108.56 +$1.61
DJIA: 34,433 -18
NASDAQ: 13,344 +6
S&P 500: 4393 unch
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.