January 13, 2023 – Economic News

• January 13, 2023
• realestatelife
• Business & Markets, Fed, Interest Rates, Politics & Economy, Rates, Real Estate, Real Estate Finance, Recession, World News, Your Real Estate Life

MBS OVERVIEW

4:00 EST – Our benchmark FNMA MBS 6.00 February Coupon is down -16 BPS with 60 minutes left to trade.

Genco Olive Oil: December Import Prices were higher than expected and signal future inflationary pressure. MOM, they were up 0.4% vs. est. of -0.8% and YOY they were up 3.5% vs. est. of 2.7%. Export Prices from the U.S. tanked though which simply confirms weaker demand out of Europe due to their economic woes. MOM, it was down -2.6% vs. est. of -0.5%.

Consumer Sentiment: The Preliminary UofM Consumer Sentiment Index was much stronger than expected, rising to 64.6 vs. est. of 60.5. There was a big move lower in 1 year inflation expectations from 4.4% down to 4.0%. The 5 year inflation expectations moved from 2.9% to 3.0%

Interest rates increased a little today ahead of the holiday on Monday, nothing substantive just traders easing back before the holiday.

The big banks reported earnings today, the four largest commercial banks reported mixed fourth quarter, but were considered better than expectations. The banks becoming more convinced the US will fall into recession this year, expecting a minor decline that won’t last long and driven by the Fed’s rate increases. BofA’s Moynihan says a mild recession in mid 2023; the CEO’s statement mirrors the earnings report for JPMorgan Chase, whose economic outlook calls for “a mild recession in the central case.”

Recent data reveals consumers are increasing the use of credit cards, COVID windfalls used up?

The US debt ceiling will be met next Thursday, no worries; Janet Yellen saying with maneuvering she can hang on until June. Republicans refusing to go along with Democrat’s $1.4 trillion package wanting spending cuts. Not news, the debt ceiling default it’s an annual event of passage, but at the end of the day it gets done by increasing the ceiling.

Next Week’s calendar has several key releases. Tuesday Jan Empire State manufacturing index. Wednesday Dec PPI, Dec retail sales, Dec industrial production and factory use, Nov business inventories, Jan NHAB housing market index, Fed Beige Book. Thursday weekly claims, Dec housing starts and permits, Jan Philadelphia Fed business index. Friday Dec existing home sales, Dec consumer confidence index.

This Week: The 10 yr. note this week -5 bps, the 2 yr. note -6 bps. MBS prices up 1 bp. The DJIA increased 662, NASDAQ +510, S&P +104. Bitcoin had the best week in 18 months increasing 3,482; gold increased $50.00 on continuing dollar weakness, the dollar index fell 1.71, a strong move. Crude oil increased $6.28.

Started today floating but locked when the 10 yr. note increased, MBS prices down 33 bps on the day and -22 bps from 9:30 am.