CHM Blog

This week had a lot to think about; FOMC, ISM manufacturing and ISM services, a rate increase, corporate earnings. At 8:30 am ET the final and one of the week’s keys, April employment data. The report much stronger than forecasts. The unemployment rate expected unchanged at 3.6% declined to 3.4%. Non-farm payrolls expected +178K increased 253K (March revised from 236K to 165K), private jobs expected 153K increased 230K (March revised from 189K to 123K). The revised March jobs tempered the stronger April data, the average job gains over the last two months 209K; private jobs, over the last two months 176K. Average hourly earnings expected unchanged at +0.3% increased 0.5%, year/year thought to be 4.2% increased 4.4%, (March year/year revised from 4.2% to 4.3%).

Initial reaction (9 am), sent the 10 year note up from 3.38% yesterday to 3.45%, MBS prices on the initial reaction -20 bps. The stock indexes in futures trading, the DJIA +244, NASDAQ +86, S&P +23.

The regional banking sector still boiling, several regional banks have been hit hard this week with concern that big unrealized losses on bond investments might push some of them to the brink, four banks have failed. This morning the headline banks that have been hit hard this week are rebounding. PacWest’s shares gained as much as 26% in US premarket trading, Western Alliance Bancorp rose 18%. Charles Schwab Corp, whose massive banking unit has been a source of investor concern, added 3% after an update showed outflows slowed for a third month.

At 9:30 am the DJIA opened +307, NASDAQ +112, S&P +38; it is the first time this week stocks are trading stronger. The 10 year 3.44% +6 bps. FNMA 6.0 30 year coupon -6 bps and -3 bp from 9:30 am yesterday; 5.5 coupon -17 bps and -6 bps from 9:30 am yesterday.

The only data remaining today, March consumer credit at 3 pm this afternoon, not much of a market mover.

10 year note and MBSs can’t break away from 3.40%; Monday 3.60% the top of its 8-week range, yesterday the low 3.30% (closed 3.38%). The Fed may pause in June, supporting rates; labor markets strong, earnings strong supporting pressuring on rates. This week so far, the 10 year note is unchanged from last Friday and MBS prices -3 bps on the 6.0 coupon.

PRICES @ 10:00 AM

10 year note: 3.45% +7 bp

5 year note: 3.42% +9 bp

2 year note: 3.90% +10 bp

30 year bond: 3.79% +5 bp

Libor Rates: 1 month 5.099%; 3 month 5.324%; 6 month 5.391%; 1 year 5.260% (5/4/23)

30 year FNMA 6.0: @9:30 am 101.94 -6 bp (-3 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 100.88 -17 bp (-6 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 100.63 -8 bp (+4 bp from 9:30 am yesterday)

Dollar/Yuan: $6.9175 +$0.0109

Dollar/Yen: 135.01 +0.71 yen

Dollar/Euro: $1.0984 -$0.0027

Dollar Index: 101.63 +0.23

Gold: $2013.00 -$42.00

Bitcoin: 29,145 +254

Crude Oil: $71.29 +$2.73

DJIA: 33,5572 +445

NASDAQ: 12,123 +157

S&P 500: 4114 +53

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.