CHM Blog

This morning February CPI (consumer price index) was in line with estimates. Inflation stable but above-target. However, the full effect of the energy surge from the Iran conflict has yet to be shown. The heavyweight shelter index increased 3% over the last year, the same pace as in January. Other indexes with notable increases over the last year include medical care (+3.4%), household furnishings and operations (+3.9%), recreation (+2.3%), and personal care (+4.5%).

Weekly MBA mortgage applications last week +3.2% from +11.0% the previous week. Purchase apps +7.8% from 6.1% and re-finance apps +0.6% after increasing 14.3% the week before.

The International Energy Agency is proposing releases of oil reserves. Talk of 400 million barrels which is twice the largest the IEA has ever done. Countries are expected to decide on the proposal today. It will be adopted if no one objects, but even one country’s protests could delay the plan, officials said. The Straits of Hormuz through which most mid-east oil flows is essentially closed. Crude prices early this morning have not changed much from yesterday.

The FOMC meets next week. With the increase in energy prices recently the wider outlook for increasing inflation has increased; prior to the conflict markets were pricing in at least two cuts later this year, now traders not sure if any Fed cuts will occur. All depends how long the US/Iran conflict continues and how it will end.

The 10 year note this morning once again testing its resistance at 4.20%.

At 1 pm Treasury will sell $39B of 10 year notes.

Today’s focus, crude oil prices, and any news from the US and/or Iran.

PRICES @ 10:00 AM

10 year note: 4.19% +3 bp

5 year note: 3.77% +2 bp

2 year note: 3.63% +2 bp

30 year bond: 4.83% +4 bp

30 year FNMA 5.0: @9:30 am 99.52 -15 bp (-31 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 101.05 -7 bp (-13 bp from 9:30 am yesterday)

30 year GNMA 5.0: @9:30 am 99.95 -13 bp (-21 bp from 9:30 am yesterday)

Dollar/Yen: 158.61 +0.56 yen

Dollar/Euro: $1.1582 -$0.0029

Dollar Index: 99.10 +0.28

Gold: $5,179.70 -$62.40

Bitcoin: 70,506 +450

Crude Oil: $85.16 +$1.71

DJIA: 47,434 -272

NASDAQ: 22,767 +70

S&P 500: 6783 +2

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.

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