Market Wrap-up
Our benchmark FNMA MBS 5.500 March Coupon is down -30 BPS at 3:15 PM ET.
Taking it to the House: January Building Permits were 1.376M versus estimates of 1.470M. Housing Starts were 1.487M versus estimates of 1.350M.
Jobs, Jobs, Jobs: Initial Weekly Jobless Claims remained very low at 213K versus estimates of 215K. The closely watched 4 week moving average dropped to 212K. Continuing Claims remained very high but did move a little lower from 1.871M to 1.850M.
Trade Balance: The January Trade Deficit was smaller than expected, -54.5B versus estimates of -66.6B.
Treasury Dump: We had an important 30Y bond auction at 1:00. $22B went off at a high yield of 4.871% and a bid-to-cover ratio of 2.45.
On Deck for Tomorrow: Big Day! PCE, Core PCE, Personal Income and Spending, Revised GDP, JOLTS and Consumer Sentiment.
Ever so often markets lose their cool; there can be unexpected news that upsets markets, that is normal but what is happening now in stocks and bonds has become pure panic. We have warned continually that lenders should lock, and I hope they have but today looks like the beginning of a blow-off, defined as the final gasp of investors and traders after continual and unabated movement.
Today the MBS market finally hit the wall, (at 3 pm -47 bps FNMA 5.0 30 year coupon). The 10 rising 33 bps in nine sessions have sent mortgage prices climbing as investors and traders took their last breaths. Including today MBS prices over the last nine sessions the price of the 5.0 FNMA coupon has fallen 75 bps, three quarters of a percent.
It’s the war, the fear it will get worse, some oil traders seeing crude at $150.00. Iran is successfully causing energy prices to explode leading to increasing views that inflation will scream higher and the economy to crater. Today the Navy added more fear saying it cannot open the Strait of Hormuz, escorting ships through for at least for another three weeks. What is the War Dept thinking, why does it appear the US didn’t think about the Strait?
Markets are approaching a point where the strong selling will dissipate. Not to say rates will fall or the stock market is a buy, but the recent massive selling should capitulate over the next day or two.
Inflation Nation: The older January PCE data was largely as expected with headline PCE MOM 0.3% versus estimates of 0.3% and YOY 2.8% versus estimates of 2.9%. Core (ex food and energy) PCE up 0.4% versus estimates of 0.4% and YOY, it was 3.1% versus estimates of 3.1%.
Incomes and Spending: Personal Incomes were light at 0.4% versus estimates of 0.5% and Personal Spending was 0.4% versus estimates of 0.3%.
Report Card: The 4th QTR GDP was revised lower and was halved – dropping from 1.4% down to 0.7% with one more revision to go.
Rosie the Riveter: January Durable Goods Orders were a big miss to the downside, -1.4% versus of 1.2%. Ex Transportation 0.4% versus estimates of 0.5% and the more closely watched NonDefense Capital Goods Ex Aircraft was flat at 0.0% versus estimates of 0.5%.
Jobs, Jobs, Jobs: The delayed January Job Openings and Labor Turnover Survey (JOLTS) was better than expected with 6.946M unfilled jobs, versus estimates of 6.700M.
Consumer Sentiment: The preliminary March UofM Consumer Sentiment Index remained in the toilet with a 55.5 versus estimates 55.0 reading. 1 year inflation expectations remained at 3.4%.
Inflation outlooks and economic growth, both subject now. Overall, the Iran conflict is confusing markets, how high will inflation increase, are jobs about to fall, how high will oil prices go, is the new Iran leader dead? Obviously, there are more questions than solid answers which make even the short-term outlooks more guessing than intelligent answers. Some continue to forecast increasing oil prices, some believe oil has peaked, some think the conflict will be short lived others look for a long-term engagement. I could go on with a list of questions as long as your arm.
One thing abundantly clear, there is no running to the safety of US treasuries. The stock market before the war was signaling a technical correction, add the war and mix in panic. Prior to Iran there was universal belief the Fed would lower rates by as many as three cuts this year, that belief pushed US interest rates 40 bps lower (10 year), rate have abandoned cuts the last couple of weeks. Next Wednesday the FOMC meeting and Powell’s press conference, markets holding collective breaths how the Fed will frame the outlook. Given that forecasts from economists and analysts are all over the landscape Powell isn’t likely to clear the air much. Its day top day now.
Next Week’s Calendar: Monday March NFIB small business optimism index, Feb industrial production and capacity utilization. Tuesday Mar NAHB housing market index, Feb pending home sales. Wednesday FOMC policy statement and Powell’s presser, weekly MBA mortgage applications, Fen PPI, January factory orders. Thursday weekly jobless claims, Mar Philadelphia Fed business index, Jan new home sales. Nothing Friday.
Interest rates began today a little better, at 9:30 MBS prices +12 bps, the 10 4.25% -2 bps. The day proceeded, rates increased, and MBS prices fell. Technically, the 10 still holding below 4.30% by a thread.
This week’s data: 10 year note yield +15 bp, 2 year note +17, FNMA 5.0 30 year coupon -89 bps. DJIA -942, NASDAQ -283, S&P -108. Gold $127.00, crude +7.25. Dollar index +1.41 (strong gain), bitcoin +3,290.
PRICES @ 4:00 PM
10 year note: 4.29% +2 bp
5 year note: 3.88% unch
2 year note: 3.74% unch
30 year bond: 4.91% +2 bp
30 year FNMA 5.0: 98.84 -13 bp (-25 bp from 9:30 am)
30 year FNMA 5.5: 100.62 -7 bp (-14 bp from 9:30 am)
30 year GNMA 5.0: 99.34 -13 bp (-21 bp from 9:30 am)
Dollar/Yen: 159.66 +0.31 yen
Dollar/Euro: $1.1425 -$0.0088
Dollar Index: 100.43 +0.69
Gold: $5,036.20 -$89.60 (gold declined this week on a stronger dollar)
Bitcoin: 71,075 +609
Crude Oil: $97.90 +$2.17
DJIA: 46,559.83 -118.02
NASDAQ: 22,105.36 -206.62
S&P 500: 6632.22 -40.40
SOFR Data 03/13: 30-DAY AVERAGE(%): 3.67223, 90-DAY AVERAGE(%): 3.69077, 180-DAY AVERAGE(%): 3.92216, INDEX: 1.23547982
Poland
| Name, not sorted | Value, not sorted | Change, not sorted | % Change, not sorted | 1 Month, not sorted | 1 Year, not sorted | Time (EDT), not sorted |
| WIG20:IND
|
3,291.27 | 21.44 | 0.65% | 2.03 | 25.30% | 12:15 PM |
| WIG:IND
|
120,935.00 | 943.60 | 0.77% | 2.90 | 27.36% | 12:15 PM |
| WIG30:IND
|
4,160.81 | 32.07 | 0.76% | 3.47 | 22.40% | 12:15 PM |
WALUTY
| Currency, not sorted | Value, not sorted | Change, not sorted | Net Change, not sorted | Time (EDT), not sorted |
| EUR-USD
|
1.1523 | 0.00 | 0.09% | 8:51 PM |
| USD-JPY
|
159.1500 | 0.20 | 0.13% | 8:51 PM |
| GBP-USD
|
1.3360 | 0.00 | 0.13% | 8:51 PM |
| AUD-USD
|
0.7084 | 0.00 | 0.10% | 8:52 PM |
| USD-CAD
|
1.3625 | 0.00 | 0.12% | 8:51 PM |
| USD-CHF
|
0.7854 | 0.00 | 0.08% | 8:51 PM |
| USD-MXN
|
17.8200 | 0.04 | 0.25% | 8:55 PM |
| USD-CZK
|
21.2051 | 0.03 | 0.15% | 8:54 PM |
| USD-SKK
|
26.1468 | 0.02 | 0.09% | 8:54 PM |
| USD-PLN
|
3.7077 | 0.01 | 0.16% | 8:54 PM |
| USD-HUF
|
340.2100 | 0.69 | 0.20% | 8:54 PM |
| USD-RUB
|
79.5301 | 0.01 | 0.02% | 8:36 PM |
POŻYCZKI HIPOTECZNE
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OPROCENTOWANIA POŻYCZEK (,ŚREDNIA KRAJOWA)
| ELITE 21-30 YEAR | |||
| RATE | 15 DAY | 30 DAY | 45 DAY |
| 7.500 | -3.438 | -3.348 | -3.218 |
| 7.375 | -2.975 | -2.885 | -2.755 |
| 7.250 | -2.491 | -2.401 | -2.271 |
| 7.125 | -2.368 | -2.278 | -2.148 |
| 6.999 | -2.025 | -1.935 | -1.805 |
| 6.875 | -1.605 | -1.515 | -1.385 |
| 6.750 | -1.044 | -0.954 | -0.824 |
| 6.625 | -1.555 | -1.465 | -1.335 |
| 6.500 | -1.176 | -1.086 | -0.956 |
| 6.375 | -0.591 | -0.501 | -0.371 |
| 6.250 | 0.047 | 0.137 | 0.267 |
| 6.125 | -0.255 | -0.165 | -0.035 |
| 5.999 | 0.158 | 0.248 | 0.378 |
| 5.875 | 0.801 | 0.891 | 1.021 |
| 5.750 | 1.555 | 1.645 | 1.775 |
| 5.625 | 1.394 | 1.484 | 1.614 |
| 5.500 | 1.915 | 2.005 | 2.135 |
| 5.375 | 2.748 | 2.838 | 2.968 |
| 5.250 | 3.610 | 3.700 | 3.830 |
| ELITE 11-15 YEAR | |||
| RATE | 15 DAY | 30 DAY | 45 DAY |
| 6.625 | -2.538 | -2.448 | -2.318 |
| 6.500 | -2.344 | -2.254 | -2.124 |
| 6.375 | -2.105 | -2.015 | -1.885 |
| 6.250 | -1.625 | -1.535 | -1.405 |
| 6.125 | -1.419 | -1.329 | -1.199 |
| 6.000 | -1.180 | -1.090 | -0.960 |
| 5.875 | -0.904 | -0.814 | -0.684 |
| 5.750 | -0.409 | -0.319 | -0.189 |
| 5.625 | -0.219 | -0.129 | 0.001 |
| 5.500 | 0.051 | 0.141 | 0.271 |
| 5.375 | 0.372 | 0.462 | 0.592 |
| 5.250 | 0.899 | 0.989 | 1.119 |
| 5.125 | 1.246 | 1.336 | 1.466 |
| 5.000 | 1.597 | 1.687 | 1.817 |
| 4.875 | 1.974 | 2.064 | 2.194 |
| 4.750 | 2.513 | 2.603 | 2.733 |
| 4.625 | 2.490 | 2.580 | 2.710 |
| 4.500 | 2.881 | 2.971 | 3.101 |
| 4.375 | 3.285 | 3.375 | 3.505 |