Listen Live
Saturday’s: 9AM 1590 AM/97.9 FM KVTA
Sunday’s: 7AM K-EARTH 101 FM
Listen Live
Saturday’s: 9AM 1590 AM/97.9 FM KVTA
Sunday’s: 7AM K-EARTH 101 FM
MBS OVERVIEW
4:00 EST – Our benchmark FNMA MBS 6.00 May Coupon is down -5 BPS with 60 minutes left to trade.
Domestic Flavor:
Taking it to the House: March Building Permits dropped from an annualized pace of 1.55M units down to 1.413M. Housing Starts moved from 1.432M down to 1.420M. The good news for the housing industry is that SFR (the actual housing market) increased by 2.7% to 861K which is the biggest increase since December. The weakness in the data came from multi-family/rental units.
The Talking Fed: Atlanta Fed President Bostic said that he sees that “one more move should be enough for us” on interest rates. Fed Gov Bowman did not address interest rates nor the economy but her speech focused on proposed digital currency.
Across the Pond:
China: Their 1st QTR GDP was stronger than expected (4.5% vs. est. of 4.0%) and was a big improvement over the Q4 growth rate of 2.9%
Great Britain: Unemployment Rate 3.8% vs. est. of 3.7%
Canada: CPI MOM 0.5% vs. est. of 0.5%
On Deck for Tomorrow: Weekly Mortgage Applications, 20Y Bond Auction, Fed’s Beige Book.
Technical resistance at 3.60% on the 10 year, tested yesterday and again today, each time it stopped improvements as we noted this morning. It isn’t a major technical level but enough to momentarily end the assent in rates; from last Thursday the 10 yield has increased 16 bps through yesterday. Today it tagged 3.60% again then settled at 3.58% -2 bps. MBS prices ending the day about unchanged from 9:30 am ET this morning.
Two Fedsters spoke today; Atlanta Fed President Raphael Bostic said he favors raising interest rates one more time and then holding them above 5% for some time to curb inflation that remains too high. “There is still more work to be done, and I am ready to do it,”… “if the data come in as I expect, we will be able to hold there for quite some time.” St. Louis Fed chief James Bullard, who’s been among the more hawkish policymakers, said he favors getting rates into a 5.5% to 5.75% range. “Financial stress seems to be abated, at least for now,” …And so it’s a good moment to continue to fight inflation and try to get on that disinflationary path.” … “I think inflation’s going to be sticky going forward and it’s going to be hard to get inflation back down to the 2% target,” he said during the event. “So, we’re going to have to stay at it.” Neither Bostic nor Bullard votes on monetary policy this year, still have an input.
Tomorrow weekly MBA mortgage applications at 7 am, then at 2 pm the Fed’s Beige Book.
No movement in stock indexes today. Investors in a mixed outlook, some say recession, others say not so fast. It is going to be driven by interest rates and what the Fed does, and that won’t be decided until at least may 3rd at the next FOMC meeting.
