MAGAZYN KIESZEŃ (449) 04.15.2023

Market Wrap-up

4:00 EST – Our benchmark FNMA MBS 6.00 May Coupon is down -35 BPS with 60 minutes left to trade.

Retail Snails: Headline March Retail Sales showed another monthly decline, contracting by -1.0% vs. est. of -0.4%. Ex Autos, it was down -0.8% vs. est. of -0.3% and the Control Group shrank by -.03% vs. est. of +0.6%.

Genco Olive Oil: Both Import and Export Prices moved noticeably lower. Import Prices MOM fell by -0.6% vs. est. of -0.1% and Export Prices were down -0.3% vs. est. of -0.1%.

Rosie the Riveter: March Industrial Production was stronger than expected, up 0.4% vs. est. of 0.2% plus as strong revision to the prior month. Capacity Utilization was 79.8% vs. est. of 79.0%

Consumer Sentiment: The Preliminary April UofM Consumer Sentiment Index hit 63.5 vs. est. of 62.0. The 5 year inflation outlook remained at 2.9%

The Talking Fed: Fed Gov. Waller said that CPI shows that aggregate demand still needs to be lowered and can see that the Fed may have to hike 1 or 2 more times which is more hawkish than other commentary from other Fed speakers.

Interest rates remain choppy, increasing today and yesterday ending the week higher. Inflation remains on the front burner. This morning the ECB head, Christine Lagarde, remarking inflation still too high and offered up her thoughts for a 50 bp increase when the ECB meets next week. Fed governor Christopher Waller speaking; “Monetary policy needs to be tightened further,”… Chicago Fed Pres. Austin Goolsbee; saying tighter credit conditions stemming from the recent banking turmoil could help the US central bank in its effort to bring down inflation, “We’ve still got several weeks before the FOMC meeting, so I don’t want to specify to the basis point what is that going to mean for what I would be for at the FOMC meeting, because I still want to see the data,”… “But let’s just be mindful that we’ve raised a lot, it takes time for that to work its way through the system.” Goolsbee, a newbie at the Fed coming from Wall Street. Consumers leading the economic growth, the U. of Michigan consumer sentiment exceptionally strong this morning, but March retail sales were weak once again. Finally, today March factory use increased to its best level in months. Interest rates increased on all the info and data and spent the rest of the day with no movement.

The bellwether 10 year note has hugged a 20 bps range from 3.60% to 3.40% since mid-March. Next week the range may be tested on the upside at 3.60%.

Next Week, housing data headlines. Monday April NY Empire State manufacturing index, April NAHB housing market index. Tuesday March housing starts and permits. Wednesday weekly MBA mortgage apps, April Fed beige Book. Thursday weekly claims, April Philadelphia Fed business index, March existing home sales. Friday April preliminary PMI manufacturing and services.

This Week, 10 year note yield increased 11 bps to 3.51%, FNMA 5.5 30 year coupon this week -12 bps. The DJIA +397, NASDAQ -365, S&P +32. Crude oil increased $2.18 on output cuts from OPEC+. Gold generally unchanged -$4.00. The dollar index tis week -0.48. Early this week a comment from a crypto follower increased the coin 2,443, all in one day, since Wednesday no change. 30 year FNMA rate 6.50%.

CENY @ 4:00 PM 04.14.2023

10 year note: 3.52% +8 bp

5 year note: 3.60% +10 bp

2 year note: 4.10% +11 bp

30 year bond: 3.74% +5 bp

Libor Rates: 1 month 4.948%; 3 month 5.260%; 6 month 5.306%; 1 year 5.286% (4/13/23)

30 year FNMA 6.0: 101.75 -30 bp (+2 bp from 9:30 am)

30 year FNMA 5.5: 100.63 -39 bp (-10 bp from 9:30 am)

30 year GNMA 5.5: 100.59 -33 bp ( -5 bp from 9:30 am)

Dollar/Yuan: $6.8715 +$0.0026

Dollar/Yen: 133.77 +1.20 yen

Dollar/Euro: $1.0998 -$0.0048

Dollar Index: 101.57 +0.56

Gold: $2020.00 -$35.20

Bitcoin: 30,360 +49

Crude Oil: $82.64 +$0.48

DJIA: 33,886.47 -143.22

NASDAQ: 12,123.47 -42.81

S&P 500: 4137.64 -8.58

SOFR Data 04/14: 30-DAY AVERAGE(%): 4.75845, 90-DAY AVERAGE(%): 4.59000, 180-DAY AVERAGE(%): 4.23334, INDEX: 1.07376062