March 30th, 2022 8:45 AM by Richard Sardella MLO.100007700/NMLS 233568
A little volatility very early this morning, the 10 yield dipped to 2.35% -5 bps then rebounded after the 8:30 am ET data to trade unchanged from yesterday, early MBS prices began unchanged.
At 8:15 am the March ADP private jobs, expected at 438K, were reported at 455K, not too far from estimates. February ADP was revised from 475K to 486K. Companies with fewer than 50 employees added 90,000 jobs in the month, while large businesses added 177,000 jobs. Friday the BLS March employment report.
Also, this morning Q4 GDP final report, the third read, the first two had GDP at 7.1% but the final was lower at 6.9%; Q4 personal consumption expenditures expected at 3.1% were also weaker at 2.5%. Old news since we’re finishing Q1 2022 Friday.
Weekly MBA mortgage applications were a disappointment but not much of a surprise. The composite -6.8%, purchase apps +1.0% while re-finances plummeted 15.0%.
Talks between Ukraine and Russia are continuing in Turkey, depending on when we get any updates the outlook changes. Yesterday a little optimism, crude oil was down, grain prices lower, gold lower, today all are up so far.
Increased chatter now about the potential of a recession as the yield curve inverts, the 3, 5, and 7 yr. treasury notes have inverted against the 10 yr. The key 2 yr. note hasn’t inverted, yesterday for a brief time it did but by the end of the session and this morning the 2 is still lower than the 10. Markets focusing on historical evidence that when the curve inverts (short term rates higher than long term rates) it signals a recession is coming. Studies of previous inversions reveal that from the beginning of inversion to an actual recession is about 16 months.
PRICES @ 10:00 AM
10 yr note: 2.41% +1 bp
5 yr note: 2.50% unch
2 Yr note: 2.36% -1 bp
30 yr bond: 2.53% +3 bp
Libor Rates: 1 mo 0.457%; 3 mo 1.006%; 6 mo 1.500%; 1 yr 2.030% (3/29/22)
30 yr FNMA 4.0: @9:30 101.81 -6 bp (+26 bp from 9:30 am yesterday)
30 yr FNMA 4.5: @9:30 103.28 -11 bp (+26 bp from 9:30 am yesterday)
30 yr GNMA 4.0: @9:30 101.73 -11 bp (+17 bp from 9:30 am yesterday)
Dollar/Yuan: $6.3508 -$0.0134
Dollar/Yen: 121.69 -1.20 yen
Dollar/Euro: $1.1156 +$0.0068
Dollar Index: 97.86 -0.55
Gold: $1934.90 +$16.90
Bitcoin: 46,977 -439
Crude Oil: $108.38 +$4.14
DJIA: 35,345 +50
NASDAQ: 14,570 -49
S&P 500: 4627 -5
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.