Market Commentary [2.7.2024]
Bond pricing is slightly worse this morning as treasury yields inch slightly higher. The U.S. 10 Year Treasury yield is currently 4.113%, up from the open at 4.102%. Treasury yields have been holding a pretty tight pattern in recent weeks with the 10-year Treasury yield flirting with 4%. Investors continue to play the usual guessing game on rate cuts after Powell’s latest comments suggest that it could be a while before we see them. The U.S. trade deficit narrowed by 18.7% or 62.2 billion, the first time in 4 years. Exports increased by 1.5% as demand for a variety of products increased. Imports rose by a smaller 1.3% with purchases of crude oil, autos and travel declining. Four Fed officials have speaking engagements Today as the market continues to look for clues on future monetary policy. Consumer credit will be released at 3pm ET. Mortgage rates will likely be slightly worse this morning all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [2.6.2024]
Bond pricing and treasury yields are flat in early trading. The U.S. 10 Year Treasury yield is currently 4.148%, just above the open at 4.146%. Investors continue to fret over the timeline for interest rate cuts while the Fed continues to point to recent strong economic data that could delay or postpone the use of rate cuts. The chance of a rate cut in March was high back in December but has dwindled down to a 16% probability in recent polls. The market seems to be in a holding pattern at the moment. There are no economic releases Today, however, four Fed officials have speaking engagements from noon to 7 pm ET leaving room for commentary that could weigh on market sentiment. Mortgage applications dropped by 7.2% in the latest MBA reading after three straight weeks of positive application demand. Low existing housing supply is limiting options for prospective buyers and keeping prices elevated which continues to impact affordability in a mix of higher prices and rates. Mortgage rates will likely print flat to slightly worse all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [2.5.2024]
Bond pricing is worse this morning as treasury yields inch higher. The U.S. 10 Year Treasury yield is currently 4.129%, up from the open at 4.054%. Powell told CBS Sunday that the central bank would be cautious about rate cuts and that the Fed was still searching for additional evidence of inflation returning to the Fed’s target of 2%. Powell also concluded that the pace of rate cuts would likely be slower than the market is anticipating. The Unemployment report released Friday showed unexpected signs of resilience with payrolls far exceeding forecast. The S&P final U.S. services PMI is due out this morning at 9:45am ET alongside the start of several Fed speaking engagements that will span the week. This week is relatively light on economic news with U.S. trade deficit Wednesday, initial jobless claims Thursday and CPI revisions Friday. The rest of the week is filled with Fed speaking engagements which could weigh on market sentiment. Mortgage rates are under upward pressure this morning all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [2.2.2024]
Bond pricing is worse this morning as treasury yields find new footing. The U.S. 10 Year treasury yield is currently 4.001%, up from the open at 3.876%. Overall, yields have dipped on economic news this week and the anticipation that the Fed is looking at rate cuts sometime this year. Powell did state that while investors have been hoping for a rate cut as early as March, that it was at this point, unlikely. Jobs data this week has missed the mark, but investors are awaiting the latest nonfarm payroll data this morning with forecast of 185,000 job adds and the unemployment rate forecast to be 3.8%. Factory orders and consumer sentiment will close out the week with releases at 10am ET. Mortgage rates are under slight upward pressure this morning all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [2.1.2024]
Bond pricing and treasury yields are relatively flat after Yesterday’s Fed meeting. The U.S. 10 Year Treasury yield is currently 3.897%, just below the open at 3.931%. The Fed announced that they would leave rates unchanged for the fourth time in a row and provided new hints on monetary policy going forward. Powell noted in his press conference afterward that it was unlikely that rates would be cut at the Fed’s next meeting in March, but they would more than likely be needed this year. The Fed’s statement noted that further rate hikes would no longer be on the table for use. This was a shift in policy from December. Initial jobless claims is due out this morning along with U.S. productivity, manufacturing data, construction spending and U.S. auto sales data. Investors are looking ahead to Tomorrow’s Nonfarm payrolls report after other jobs data this week seems to show continued slowing in the jobs market. Mortgage rates will likely hold steady this morning all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [1.31.2024]
Bond pricing is improved this morning as treasury yields inch lower. The U.S. 10-Year Treasury yield is currently 3.969%, down from the open at 4.039%. Investors are awaiting Today’s interest rate decision from the Fed, but more importantly fresh commentary on the Fed’s monetary policy stance and potentially where it might see the need for rate cuts in the year ahead. Data Yesterday showed consumer confidence ticking up to its highest level in December, but Job openings coming in higher than forecast. ADP Employment, released early this morning, showed 107k jobs against forecast of 145k and a downwardly revised 158k in December. The economic picture has brightened with progress on inflation despite a slowdown in hiring and pay according to the latest report. The 10-Year yield has crossed back through the 4% mark this morning as the market awaits the latest Fed decision. Mortgage rates will likely print flat to slightly better all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [1.30.2024]
Bond pricing and treasury yields are flat in early trading. The U.S. 10 Year Treasury yield is currently 4.07%, just below the open of 4.078%. Investors are awaiting fresh jobs data this week as the Fed begins its latest policy meeting Today with a decision on interest rates due Tomorrow at 2pm ET. The markets are expecting the Fed to leave rates unchanged, however, many are hoping for more clarity on rate cuts which have permeated market sentiment for the past month or two. The latest round of Fed minutes from the Fed’s December meeting showed that the path ahead was uncertain for monetary policy, but policymakers believed that they could be looking at three rate cuts in 2024. Market participants continue to price in a 50% likelihood of a rate cut at the Fed’s March meeting. The S&P Case Shiller home price index is due out this morning at 9am ET, followed by the latest JOLTS report at 10am ET which will provide a look at the first round of jobs data this week. Consumer confidence releases at 10am ET. Mortgage rates will likely hold steady this morning all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [1.29.2024]
Bond pricing is slightly improved in early trading as treasury yields slide lower. The U.S. 10 Year Treasury yield is currently 4.112%, down from the open at 4.139%. The market seems to be in a holding pattern with the 10 Year yield hovering near the 4% level since early December as investors continue to hope for rate cuts. This week is filled with jobs data. Job openings, ADP employment, initial jobless claims, and U.S. nonfarm payrolls to finish off the week. The jobs market has been resilient throughout the past couple of years and has provided the backbone for spending and consumption needed to keep the economy going despite higher rates and prices. The Fed has looked to the jobs market as part of their monetary policy approach, utilizing rate hikes until the jobs market begins to feel the impacts. There are no economic releases Today, however, the Fed will be meeting this week to discuss interest rates with a final decision on Wednesday at 2pm ET. Investors are expecting the Fed to keep rates unchanged but are also hopeful that fresh guidance may come out through this week’s meeting, including when the Fed might consider rate cuts. Mortgage rates will likely stay flat to slightly better this morning all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [1.26.2024]
Bond pricing and treasury yields continue to hold steady in early trading. The U.S. 10 Year Treasury yield is currently 4.139%, just above the open at 4.112%. PCE, the Fed’s preferred inflation measure, showed a rise in inflation of 0.2% last month and annual increase of 2.9% excluding food and energy. Both were inline with forecast. The positive inflation reading comes just after a stronger than expected GDP number showing higher than forecasted economic growth. Economic data has been mixed since the start of the year leaving just enough ambiguity to make it difficult for the Fed to make its next move. Market participants seem to remain cautious as they anticipate the Fed’s path ahead. The market originally priced in rates cuts as early as March as last year came to a close, but then the likelihood has reduced as the market has digested each new round of economic data. All the while, yields have been very flat with the 10-year hovering just over the 4% mark. Pending home sales is still on the schedule this morning at 10am ET and will close out the week in terms of economic release. Mortgage rates are holding steady this morning all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [1.25.2024]
Bond pricing is improved this morning as treasury yields inch lower. The U.S. 10 Year Treasury yield is currently 4.134%, down from the open at 4.184%. Lots of early economic releases this morning, however the market remains relatively unchanged. Initial jobless claims blew through forecast coming in at 214,000 vs expectation of 200,0000. Continuing claims also notched slightly higher to 1.83 million. Durable goods orders missed the mark, showing 0% vs forecast of 1.1%. GDP showed growth in Q4 at 3.3% year over year vs. forecast of 2.0%. The Q4 GDP Price Index was 1.5% year over year vs expectation of 2.3%. Overall GDP was fairly strong, while Initial claims and Durable goods came in weaker than expected. New home sales will be released at 10am ET and investors continue to wait for Tomorrow’s PCE print to see how inflation is fairing. Mortgage rates will likely print flat to slightly better all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [1.24.2024]
Bond pricing is improved in early trading as treasury yields inch lower. The U.S. 10 Year Treasury yield is currently 4.097%, down from the open at 4.134%. The market continues to brace for GDP and PCE data released Tomorrow and Friday, respectively. Both data points will be big for the Fed as they continue to plot a course for monetary policy and rate cuts. The chance of a March cut has fallen drastically on recent strong economic data but remains around or below 50% chance according to some market measures. This month’s S&P service and manufacturing data will be released at 9:45am ET. The last manufacturing reading showed decline in manufacturing conditions for December. Weakness in domestic and external demand conditions along with firms adjusting downward input buying and hiring led to some of the decline. Services saw its strongest growth in five months amidst an improved sales environment and additional hiring. Overall business confidence improved on both measures last month but are expected to pull back slightly with Today’s data. Mortgage rates are holding steady with slight bias towards improvement.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [1.23.2024]
Bond pricing is worse this morning as treasury yields inch upward. The U.S. 10 Year Treasury yield is currently 4.128%, up from the open at 4.101%. The market awaits key economic releases this week with Q4 GDP and PCE which will shed light on recent inflation. Despite the uncertain rate outlook, the Dow and S&P 500 both saw all-time highs on Monday. The economy has proven more resilient that thought with the backdrop of supportive rate cuts on the horizon. There are no scheduled economic releases Today and Tomorrow is relatively light with S&P service and manufacturing data. It feels like the market could be in for more of the same, pondering primaries and waiting until GDP and PCE release. Mortgage rates are holding steady albeit under slight upward pressure this morning all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [1.22.2024]
Bond pricing is improved this morning as treasury yields inch lower. The U.S. 10 Year Treasury yield is currently 4.094%, down from the open at 4.136%. Investors continue to try and gauge when the Fed will begin cutting interest rates which will be a key element of economic trajectory this year. Preliminary Q4 GDP will be released Thursday followed by a fresh round of PCE data Friday. Economists have forecast for a slowdown in GDP growth for the 4th quarter of 2023 and are expecting Core PCE to be roughly 3% year over year. U.S. Leading economic indicators will release at 10am ET this morning. Fannie Mae released its Economic and Housing Outlook for 2024. Fannie states that it believes that rates will moderate this year moving toward a rate below 6 percent by year end. The market shifted at the end of last year with weaker economic data which gave way to talk of rate cuts, but several releases into the new year have turned the corner and point to more and more likelihood that the Fed may hold off on rate cuts till later in the year. The dip in rates has helped mortgage application demand, which surged by over 10% for the week ending January 12th, following a 9.9% jump the previous week. Purchase applications rose by 9% while applications to refinance rose by 11%. Mortgage rates will likely remain flat to slightly better this morning all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [1.19.2024]
Bond pricing and treasury yields are flat this morning in early trading. The U.S. 10 Year Treasury yield is currently 4.151%,the same as the open. Economic data this week has taken wind out of the sails for rate cuts. Fed officials are speaking again Today, but Yesterday Fed President Bostic voiced pushback on rate cuts stating that his “outlook right now is for our first rate cut to be sometime in the third quarter this year.” The market was building in a chance of a rate cut at the Fed’s March meeting, but momentum has shifted with the expectation now near or below 50%. Consumer sentiment rebounded in December after meeting multi month lows in November. Consumers had improved views on the trajectory of inflation and the economy. Consumer sentiment releases at 10am ET and is forecast to remain flat from December. Existing home sales is also due out at 10am ET. Existing home sales declined into the end of last year as rates continued to move higher. Forecast is for a small increase in existing home sales for December relative to November. Mortgage rates will likely hold steady this morning all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [1.18.2024]
Bond pricing and treasury yields are relatively flat in early trading. The U.S. 10 Year Treasury yield is currently 4.123%, up from the open at 4.104%. Initial jobless claims fell sharply last week as tightness in the jobs market persists. Initial claims totaled 187,000 against forecast of 208,000. The print was 16,000 below the previous period. The past few weeks have pointed to a stronger jobs market with strong consumer demand and sticky inflation. Fed officials have hinted this week that rate cuts are likely this year, but it will likely take time before we see them. Housing starts and building permits are due out at 8:30am ET this morning. More housing data Tomorrow with Existing home sales and consumer sentiment to wrap up the week. Mortgage rates will likely print flat to slightly worse this morning all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [1.17.2024]
Bond pricing is worse this morning as treasury yields rise on the latest retail sales data. The U.S. 10 Year Treasury yield is currently 4.102%, up from the open at 4.062%. Yields jumped Tuesday after Fed Governor Waller suggested that while the central bank will likely cut rates this year, it may take its time. The same echoed across the globe as European bank members indicated that markets were getting ahead of themselves projecting rate cuts. December retail sales figures released this morning showed an increase of 0.6%, well through forecast and the last reading of 0.3% in November. After hotter inflation numbers, sentiment could be shifting to hold on rate cuts. A number of Fed officials are scheduled to speak Today and could reinforce the approach. Industrial production, capacity utilization and business inventories are due out at 9:15am ET. The Home builder confidence index and Fed Beige Book are also due out later this morning. Mortgage rates are under upward pressure this morning all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [1.16.2024]
Bond pricing was worse in early trading as treasury yields inched upward. The U.S. 10 Year Treasury yield is currently 4.022%, up from the open of 3.986%. Data from Friday reflected an unexpected decline in wholesale prices, giving investors hope that the Fed may still consider rate cuts as early as March. This trading week is short with retail sales due out Wednesday. Initial jobless claims and the next round of housing data via housing starts and existing home sales will release this week as well. There are lots of speaking engagements for Fed officials this week which could lead to more color on monetary policy as investors try to piece together the Fed's next move. Mortgage applications saw a nice pickup for the first week of January with overall volume increasing by 9.9% and refinance volume increasing as much as 19%. Mortgage rates are under upward pressure this morning all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [1.12.2024]
Bond pricing and treasury yields are holding relatively steady after the latest round of inflation data. The U.S. 10 Year Treasury yield is currently 3.952%, below the open at 3.962%. The 10 Year Treasury yield continues to hover around the 4% yield mark as investors continue to weigh on recent jobs and inflation data that suggests that it could be longer till we see rate cuts from the Fed. Core CPI came in on target while year over year and month over month measures showed inflation hotter than forecast. It shows that the Fed will have to be careful and that it could prove difficult to make incremental progress from here. While CPI was hotter than expected, Producer price index data released this morning showed no indication of inflation at the wholesale level with year over year inflation at 1.0% vs 1.3% forecast and -0.1% vs +0.1% forecast month over month. Core PPI also came in lighter at 1.8% vs 2.0% forecast year over year. Fed President Neel Kashkari will speak at 10am ET as this week ends. The market will be closed for MLK day Monday making for a short trading week next week. Mortgage rates will likely hold flat this morning all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [1.11.2024]
Bond pricing is settling in worse as treasury yields inch higher on this morning’s CPI release. The U.S. 10 Year Treasury yield is currently 4.049%, up from the open at 4.028%. Yields moved lower on the open ahead of the release, but volatility returned with the release and yields pushed higher. Economists were expecting the CPI to reflect 0.2% increase monthly and 3.2% move year over year. Data showed a 0.3% month over month increase and 3.4% increase year over year. Rent costs accounted for half the inflation in December. The Core inflation metric used by the Fed fell to 3.9% year over year which is the lowest seen since May of 2021. PPI will be released Tomorrow as investors continue to ponder the timing of the Fed’s potential rate cuts. Initial jobless claims came in at 202,000 vs forecast of 210,000. Continuing claims moved lower to 1.834 million but remain elevated relative to initial claims. Fed officials Loretta Mester and Tom Barkin have speaking engagements at 11:30am and 12:40 pm ET. Mortgage rates are under upward pressure this morning all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [1.10.2024]
Bond pricing is slightly improved this morning as treasury yields inch lower. The U.S. 10 Year Treasury yield is currently 3.992%, down from the open at 4.006%. The 10 Year continues to hold near the 4% psychological level with limited economic news. Investors are remaining hopeful that inflation is easing with the latest round of inflation data due out Tomorrow and Friday. The Fed’s latest meeting minutes suggest that cuts are being considered, however, timing remains unknown as the market continues to look to economic releases as a potential gauge. Wholesale inventories is due out at 10am ET followed by Fed official John Williams speaking at 3:15pm ET. Mortgage rates are likely to print flat to slightly better all else constant this morning.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [1.9.2024]
Bond pricing is worse this morning as treasury yields inch upward. The U.S. 10 Year Treasury yield is currently 4.049%, up from the open at 4.023%. While the Fed is expected to cut interest rates up to three times this year, investors are still looking for answers as to when and by how much. Strong jobs data last week has some re-assessing the timing of a potential first hike, with some still pointing to March. The U.S. trade deficit is due out at 8:30am ET this morning and Fed official Michael Barr is scheduled to speak Today at noon ET. Investors are patiently waiting for the latest round of inflation data with CPI due out Thursday and PPI due out Friday. The market seems to be in a holding pattern in the interim. Mortgage rates are under slight upward pressure this morning all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [1.8.2024]
Bond pricing is slightly improved as treasury yields look to find footing. The U.S. 10 Year Treasury is at 4.046%, just below the open at 4.061%. Yields are holding steady after last weeks jobs data proved stronger than expected, leaving investors mixed on the Fed’s approach to potentially start their rate cut cycle. Consumer credit is due out Today at 3pm ET, but investors are looking ahead this week to the latest round of inflation data in the form of CPI, released Thursday and PPI released Friday. The data could provide clues on whether higher interest rates are still influencing inflation as well as the broader economy. It’s an otherwise light week for economic release. Mortgage rates will likely hold steady this morning all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [1.5.2024]
Bond pricing is worse this morning as treasury yields inch higher. The U.S. 10 Year Treasury yield is currently 4.061%, up from the open at 4.002%, breaking the psychological 4% level. December’s employment report was much hotter than expected, reflecting the ongoing strength of the labor market. Yields have shifted higher in the first week of trading after all jobs data seems to reinforce that the labor market remains resilient. Nonfarm Payrolls showed 216,000 jobs added, far surpassing forecast of 170,000. The unemployment rate held steady at 3.7% vs 3.8% expected as well. A strong labor market could postpone the Fed in their approach to potentially cut rates and the market has since reduced the likelihood of a rate cut in March downward to 69%. ISM Services and Factory orders are due out at 10am ET and Fed official Tom Barking speaks at an engagement at 1:30pm ET. Mortgage rates are under upward pressure again this morning amidst the strong labor market data.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [1.4.2024]
Bond pricing is worse this morning as treasury yields inch higher. The U.S. 10 Year Treasury yield is currently 3.987%, up from the open at 3.914%. The 10 Year yield continues to hover around the psychological 4% mark as the first week of trading for 2024 has kicked off. ADP employment data showed a strong 164,000 jobs added, which exceeded market expectations of a 130,000 gain. Initial jobless claims were less than expected as well coming in at 202,000 claims vs forecast of 219,000. Continuing claims did rise, however, from 1.855 million to 1.881 million. Overall stronger jobs data this morning has yields on the rise, but investors are still waiting for the unemployment report to be released Tomorrow. S&P final U.S. services PMI will also be released this morning at 9:45am ET. Mortgage rates are under upward pressure this morning amidst the strong jobs data.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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Market Commentary [1.2.2024]
Bond pricing is worse this morning as treasury yields move higher. The U.S. 10 Year Treasury yield is currently 3.948%, up from the open at 3.899%. 2023 was filled with interest rate hikes, persistent inflation, recession fears and market shocks like the regional banking crisis as well as geopolitical concerns as wars broke out in Russia, Ukraine and Israel. Investors are hopeful as 2024 kicks off however, rates could remain higher than desired as the Fed continues its monetary policy approach. Jobs data will take the stage this week with several releases that will show the current health of the jobs market. S&P manufacturing PMI and Construction spending will be released this morning at 9:45 and 10am respectively. The S&P Manufacturing PMI fell to its lowest point in four months last month as deterioration in operating conditions continued alongside shrinkage in output and new orders. Mortgage rates will likely print higher this morning all else constant.
This week's major U.S. Economic Reports and Fed Speaker
This week's major U.S. Economic Reports and Fed Speaker
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