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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
Rate sheets should be better to start the day, probably the best we’ve seen in a couple of weeks. Bonds off to a good start, at least they are at 9am ET. However, we could see more movement depending on how the JOLTS (job openings and labor turnover survey) comes out at 10am and that will affect how AM rate sheets really look as it comes out right around the time most lenders set the first rates of the day.
Today’s ADP private payroll report this morning came in showing slightly less private jobs than was expected, and we didn’t see much of a market reaction to the news. The JOLTS will likely see a bit more of a response, especially if it shows less openings than expected, but the real moves will be saved for Friday’s non-farm payroll and wage data.
Fed Chair Jerome Powell will be testifying in front of the House Financial Services Committee today and the Senate Banking Committee tomorrow. The first day always has the most effect on markets, with the second day often being a repeat performance for a new audience. Powell’s prepared remarks to start the show have been released already, and he basically kept to the script that we shouldn’t expect more rate cuts until the Fed has “more confidence inflation is moving sustainably to 2%”. He referenced labor market strength as well and said the Fed “will carefully assess the incoming data, the evolving outlook, and the balance of risks.” Bonds were ok with all this because it is exactly what he has been saying over and over anyway.
For loans closing in less than 15 days, cautiously float. Bonds continue to slowly improve day by day, and we could see even more improvement with Friday’s jobs data. Continue to decide on a loan-by-loan basis if these loans want to risk floating into Friday and are willing to gamble that we could see rates lost all of this made up ground if the data comes in hot.
For loans closing in 15-30 days, cautiously float. These loans want to watch this week’s jobs data and then next week’s CPI inflation data on the 12th… we could see rates move lower if we get some help from lower inflation and a weaker labor market. The risks favor floating, with the current trends, even though there is definitely some risk.
For loans closing in 30+ days, float. Loans that don’t close until April or after could see help from the March 8th labor report as well as the next CPI inflation report on the 12th and the March 20th Fed meeting/press conference. Although there is always some risk, we have a good shot at improving.
Technicals:
The UMBS 5.5 coupon is at 99.44, +16bps on the day and about +30bps from when pricing came out yesterday, putting rate sheets in a position for the best pricing in a few weeks.
The 10yr Treasury yield is at 4.12, continuing to fall, although likely to see at least some resistance at the 100-day moving average at 4.10. The technicals won’t matter though if we get a weak labor reading on Friday.
