CHM Blog

Yesterday the 10 year note yield increased 8 bps, this morning the 10 began -7 bps. MBS prices yesterday -16 bps, this morning +16 bps on the 5.5 FNMA coupon, for the 6.0 coupon +14 bps.

Data at 8:30 am ET; March PCE increased 0.1% month/month, year/year +4.2%, forecasts were +0.1% month/month down from +0.3% in February, year/year expected 4.2% and down from 5.1% in Feb. The core PCE expected +0.3% reported at +0.3%, year/year forecasts +4.5% increased 4.6% and unchanged from February.

March personal income expected +0.2% increased 0.3%; personal spending thought to be 0.0% and reported 0.0%.

Q1 employment cost index, estimates were +1.0%, the index +1.2%. year/year +4.8% down from +5.1% in Q4. Wages and salaries, which account for about 70% of compensation costs, increased following a revised 1.2% increase (from 1.0%). The takeaway, labor costs didn't show any meaningful signs of slowing.

All key data points leading into the FOMC meeting next week. By 9 am there was no change, the 10 year 3.45% -8 bps: FNMA 5.5 and 6.0 coupons -16 bps. If there was any doubt about what the FOMC will do next week, the data almost guarantees the Fed will increase 25 bps then imply a pause. PCE core +0.3% month/month, the second month in a row, year/year at 4.6% is still well over the 2.0% the Fed and other central banks see as the ideal.

At 9:30 am the DJIA began -72 after increasing 525 yesterday, NASDAQ -24, yesterday +287, S&P -8 from +79 yesterday. The 10 year note 3.45% -8 bps from +3.53% yesterday and unchanged from Tuesday’s close. FNMA 5.5 coupon at 9:30 am +27 bps and 22 bps better than at 9:30 am yesterday; the 6.0 coupon +17 bps and +20 bps better than 9:30 am yesterday.

At 9:45 am the April Chicago purchasing mgrs. index, the consensus was 43.5 from 43.8, the index increased to 48.6 the highest index since August 2022.

Finally today, the April U. of Michigan consumer sentiment index, forecasts were the index at 63.5, as reported 63.5.

PRICES @ 10:00 AM

10 year note: 3.47% -6 bp

5 year note: 3.55% -3 bp

2 year note: 4.09% +1 bp

30 year bond: 3.70% -6 bp

Libor Rates: 1 month 54.034%; 3 month 5.299%; 6 month 5.387%; 1 year 5.321% (4/27/23)

30 year FNMA 6.0: @9:30 am 101.84 +17 bps (+20 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 100.78 +27 bps (+22 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 100.61 +22 bps (+27 bps from 9:30 am yesterday)

Dollar/Yuan: $6.9154 -$0.0084

Dollar/Yen: 136.18 +2.17 yen (BoJ keeping rates low)

Dollar/Euro: $1.0998 -$0.0033

Dollar Index: 101.84 +0.33

Gold: $1995.60 -$3.40

Bitcoin: 28,967 -629

Crude Oil: $75.13 +$0.37

DJIA: 33,874 +40

NASDAQ: 12,117 -25

S&P 500: 4139 +4

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.