CHM Blog

10 year note began at 3.59% +2 bps; stock indexes at 9 am ET continue to increase, the DJIA +210. MBS prices at 9 am -23 bps from yesterday’s close. The relaxation over bank issues are fading, this morning bank stocks were improving. European stocks rose and the dollar declined in the risk-on mood. Investors reaching out, taking on risk that the Fed won’t continue increasing interest rates, taking a pause. It is a very swift moving target but today the view that the Fed will back off is increasing, there is a view the Fed’s rapid increase in rates was a major cause of the failure of SVB and Signature Bank, caused by the Fed’s quick attack on inflation. Investors now expect US rates to sit around 4.3% by the end of the year, around 70 basis points lower than the current level. That is this morning’s headlines, but we don’t put a lot of credibility to it as the swings between more increases or less increases is as fluid as water over Niagara Falls.

Weekly jobless claims were +198K about as expected, the prior week revised from 191K to 195K; the 4 week average 198.25K from 196.25K. Q4 GDP thought to be 2.7% unchanged from the preliminary release last month, the final at 2.6%; personal consumption expenditures thought to be +1.4% declined to +1.0%.

A parade of Fed officials today; Boston Fed President Susan Collins and Richmond Fed President Thomas Barkin speaks at event. Treasury Secretary Janet Yellen also speaks. The calendar also has ECB Pres. Christine Lagarde and NY Fed Pres. John Williams tomorrow. Each will have their take on banks and what the Fed may be thinking, generally increasing volatility.

Tomorrow, a big day for data. In the US Feb personal income, personal spending, and inflation on the PCE, the U. of Michigan consumer sentiment index and March Chicago purchasing mgrs. index. In Europe, the Euro Zone CPI. ECB policymaker Schnabel said this morning that rising unit labor costs suggest the presence of second round inflationary effects, adding that she has not seen a general outflow of deposits from Eurozone banks.

At 9:30 am the DJIA opened +174, NASDAQ +86, S&P +25. 10 year at 9:30 am 3.58% +1 bp. Both FNMA 5.5 30 year coupon and the 6.0 coupon -9 bps; from 9:30 am yesterday; both +3 bps from 9:30 am yesterday. At the short end, the 2 year note at 9:30 am +10 bps to 4.16% after being unchanged yesterday.

Markets facing uncertainty, even with the quiet trades recently. Inflation still on the front burner and how, or if, central banks will temper rate increases or abandon the fight as inflation continues to weaken. The banking system is settling down with traders thinking the recent upheaval has run its course.

PRICES @ 10:00 AM

10 year note: 3.57% unch

5 year note: 3.69% +1 bp

2 year note: 4.14% +8 bp

30 year bond: 3.77% unch

Libor Rates: 1 month 4.840%; 3 month 5.159%; 6 month 5.210%; 1 year 5.160% (3/29/23)

30 year FNMA 6.0: @9:30 am 101.80 -9 bp (+2 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 100.69 -9 bp (+5 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 100.88 -12 bp (+5 bp from 9:30 am yesterday)

Dollar/Yuan: $6.8736 -$0.0135

Dollar/Yen: 132.75 -0.11 yen

Dollar/Euro: $1.0916 +$0.0072

Dollar Index: 102.11 -0.53

Gold: $1984.70 +$17.80

Bitcoin: 28,533 +148

Crude Oil: $73.59 +$0.62

DJIA: 32,844 +126

NASDAQ: 12,033 +107

S&P 500: 4056 +28

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.