CHM Blog

Markets waited all week for the inflation data released this morning. Since the banking problems there has been an increased debate on what the Fed may do at its May FOMC meeting. One view is the Fed moved too quickly up until now, contributing to the problems that developed in the headline banks and is also having an impact on many small banks. The other view, it will keep going to kill inflation. The inflation data this morning weaker than forecasts, but not much. Going the right way though, lower. Inflation month/month +0.3% against forecasts of +0.4% and down from January’s 0.6%, year/year +5.0% against +5.1% expected and Jan revised from +5.4% to 5.3%. Core PCE month/month +0.3% against +0.4% and down from +0.6% in Jan; year/year core +4.6% % against +4.7% expected and unchanged from Jan. The initial reaction was subdued, the 10 -2 bps, MBS prices at 9 am ET +2 bps. Feb personal income expected +0.3% was +0.3%; spending expected +0.2% was +0.2%.

At 9:30 am the DJIA opened +130, NASDAQ +21, S&P +12. 10 year at 9:30 am 3.53% -2 bps. FNMA 5.5 30 year coupon -6 bps and +8 bps from 9:30 am yesterday; 6.0 30 year coupon -17 bps and -7 bps from 9:30 am yesterday.

At 9:45 am March Chicago purchasing mgrs. index, expected at 43.9 from 43.6, the index not much changed at 43.8.

At 10 am the final U. of Michigan march consumer sentiment thought to be unchanged from mid-month at 63.4, the index declined to 62.0. Consumers getting nervous.

The 10 year note this week so far almost unchanged, this week’s range 3.51% to 3.59%. Although the initial shock over SVB has slowed. Small and mid-size banks are facing withdrawals from bank accounts, moving into money markets where rates are higher. The questions now is, are there too many small and mid-size lenders, and will the eventual fall-out force mergers that will lessen the numbers of lenders. Also, how will it affect would-be borrowers as credit will cost more and there will be less of it?

PRICES @ 10:00 AM

10 year note: 3.53% -2 bp

5 year note: 3.65% -3 bp

2 year note: 4.09% -5 bp

30 year bond: 3.71% -3 bp

Libor Rates: 1 month 4.848%; 3 month 5.177%; 6 month 5.272%; 1 year 5.231% (3/30/23)

30 year FNMA 6.0: @9:30 am 101.73 -17 bp (-7 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 100.77 -6 bp (+8 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 100.91 -5 bp (+3 bp from 9:30 am yesterday)

Dollar/Yuan: $6.8692 -$0.0026

Dollar/Yen: 133.02 +0.30 yen

Dollar/Euro: $1.0893 -$0.0010

Dollar Index: 102.31 +0.16

Gold: $1997.60 -$0.-$0.30

Bitcoin: 28,397 +243

Crude Oil: $75.27 +$0.90

DJIA: 33,028 +169

NASDAQ: 12,078 +65

S&P 500: 4071 +20

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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