March 29th, 2022 10:21 AM by Richard Sardella MLO.100007700/NMLS 233568
Once again early this morning prior to US opening the 10 yr. note jumped to 2.53% +7 bps, it lasted less than five minutes then fell to 2.45% at 9 am ET. MBSs began generally flat.
It has been a month of rapid rate increases; at the front end of the curve the 2 yr. note up 1.00% the highest in three years. The Fed now firmly on track to increase the FF rate by 0.50% in about a month (May 4th) and Powell getting more aggressive, suggesting more 50 bp increases through the next few meetings. The curve inverted between the 5 yr. and 10 yr. notes, but it’s the spread between the 2 and 10 that has more importance to traders, and it is narrowing daily, this morning the spread between the two 9 bps, yesterday 13 bps.
Case/Shiller home price index was expected +18.4% yr./yr., as reported 19.1%, in Dec the increase was 18.9%. Inventory ticked higher in February but remained far below normal levels, NAR said. The median existing-home price rose 15% in February from a year earlier, NAR said, to $357,300.
At 9:30 am the DJIA opened +365, NASDAQ +160, S&P +43. 10 yr. note 2.42% -4 bp.. FNMA 4.0 30 yr. coupon at 9:30 am +23 bps and +23 bps from 9:30 am yesterday.
At 10 am March consumer confidence from the Conference Board, expected at 107.0 from 110.5 in Feb, as reported 107.2. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—improved to 153.0 from 143.0 last month. However, the Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—declined to 76.6 from 80.8.
Three weeks ago, crude oil prices reached $130.00/barrel, recently the price has been falling, this morning down another $6.00 to $99.50. That it has calmed down is a plus for the inflation outlook, it won’t turn inflation views around, but it is a help. Not likely to see it at the pump for a week or two, assuming prices remain at these levels. The Fed is trying to that get inflation back to the Fed’s 2% target will require much higher interest rates and greater risk of recession than the Fed or markets may be thinking.
PRICES @ 10:00 AM
10 yr note: 2.40% -6 bp
5 yr note: 2.48% -8 bp
2 Yr note: 2.35% -3 bp
30 yr bond: 2.50% -5 bp
Libor Rates: 1 mo 0.450%; 3 mo 0.996%; 6 mo 1.497%; 1 yr 2.120% (3/28/22)
30 yr FNMA 4.0: 101.69 +23 bp (+23 bp from 9:30 am yesterday)
30 yr FNMA 4.5: 103.17 +17 bp (+11 bp from 9:30 am yesterday)
30 yr GNMA 4.0: 101.56 +8 bp (+8 bp from 9:30 am yesterday)
Dollar/Yuan: $6.3658 -$0.0064
Dollar/Yen: 122.53 -1.38 yen
Dollar/Euro: $1.1126 +$0.0139
Dollar Index: 98.09 -1.00
Gold: $1892.40 -$47.40
Bitcoin: 47,604 -340
Crude Oil: $99.80 -$6.16
DJIA: 35,184 +228
NASDAQ: 14,488 +133
S&P 500: 4601 +25
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.