March 3rd, 2022 9:24 AM by Richard Sardella MLO.100007700/NMLS 233568
The stock market rallied yesterday, the interest rates spiked higher in a wild day, particularly in the MBS markets. Powell made it clear that the Fed would increase the FF rate by 0.25% at the FOMC meeting. Better than expected job gans reported by ADP and news beginning to reveal Putin is losing his pals, the oligarchs, and Hungry came out condemning his merciless attacks on civilians. Once Powell made it clear that the Fed would move on the 16th of this month interest rates shot higher, the 10 yr note had been experiencing safety movements that dropped the 10 from 2.05% to 1.70% and mortgage rates from 4.17% to 3.90%. In the MBS market, at 4:00 pm ET the FNMA 3.5 coupon was down 103 bps, some recovery by 5:00 pm, at the end of the day -89 bps. Crude oil continued to increase yesterday, up $9.00; the various sanctions levied against Russia increasing the outlook that US and global inflation will continue to increase.
At 8:30 am weekly jobless claims were expected at 232K, were down to 215K, 18K and the lowest claims since the beginning of the pandemic. Q4 productivity expected +6.7% reported at 6.6%; unit labor costs were right on forecasts, +0.3%.
At 9:30 am the DJIA opened +163, NASDAQ +77, S&P +23. 10 yr at 9:30 am 1.88% +1 bp. FNMA 3.0 30 yr coupon at 9:30 am -6 bps from yesterday’s close and 51 bps lower than 9:30 am yesterday. By 10:00 am MBS prices were down 14 bps.
At 10:00 am Jerome Powell will be back at Congress at the Senate Banking Committee for his second day of testifying, generally not much new happens on the second day but traders will focus on it. Also at 10:00 am Feb ISM non-manufacturing index was expected at 60.9 from 59.9, as reported the index fell to 56.5, a huge miss that will get focus from analysts.
Tomorrow Feb employment data.
PRICES @ 10:00 AM
10 yr note: 1.88% unch
5 yr note: 1.77% +1 bp
2 Yr note: 1.52% +1 bp
30 yr bond: 2.26% unch
Libor Rates: 1 mo 0.242%; 3 mo 0.522%; 6 mo 0.796%; 1 yr 1.218% (3/2/22)
30 yr FNMA 3.0: @9:30 100.56 -3 bp (-57 bp from 9:30 am yesterday)
30 yr FNMA 3.5: @9:30 102.44 -6bp (-51 bp from 9:30 am yesterday) (at 10:00 am down 14 bps)
30 yr GNMA 3.0: @9:30 101.17 -5 bp (-47 bp from 9:30 am yesterday)
Dollar/Yuan: $6.3196 -$0.0015
Dollar/Yen: 115.68 +0.16 yen
Dollar/Euro: $1.1085 -$0.0035
Dollar Index: 97.55 +0.16
Gold: $1932.00 +$9.80
Bitcoin: 43,451 -352
Crude Oil: $109.13 -$1.47
DJIA: 34,087 +196
NASDAQ: 13,748 -4
S&P 500: 4402 +16.
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.