Morning Report: Awaiting the FOMC minutes 4/5/17

Vital Statistics:

Last Change
S&P Futures 2361.0 4.5
Eurostoxx Index 380.8 0.7
Oil (WTI) 51.7 0.7
US dollar index 90.5  
10 Year Govt Bond Yield 2.37%
Current Coupon Fannie Mae TBA 102.53
Current Coupon Ginnie Mae TBA 103.813
30 Year Fixed Rate Mortgage 4.07

Stocks are higher this morning on no real news. Bonds and MBS are down small.

The minutes from the FOMC meeting are coming out at 2:00 pm EST today. Investors will be focused on plans to shrink the balance sheet and also any sort of discussion about DC. Be careful locking around that time – we could see some volatility.

Richmond Fed President Jeffrey Lacker resigned yesterday for making unauthorized disclosures to a consulting firm owned by the Financial Times. Lacker was a non-voter, so it should make no difference to monetary policy.

Mortgage applications fell 1.6% last week as purchases rose 1% and refis fell 4%. Refis fell to 42.8%, the lowest since October 2008.

The ADP jobs number came in at 263,000 which means we should expect a strong employment situation report this Friday. The Street is predicting 178,000 jobs were added in March. Construction added 49k jobs while IT lost 10k. This is the third month in a row with more than 240k jobs added:

The Gallup US Job Creation index also hit a new high. The US PMI Services index fell however. The ISM Services index fell as well.

Don’t forget, we are exiting Q1, which for some reason has been a weak quarter for over a decade. If past trends hold, we should be seeing a pickup during the spring and summer.

Jamie Dimon weighed in on banking regulation in JP Morgan’s annual letter to shareholders. The system is much safer today than it was in 2008, however he argues that many of the regulations put in place were hastily drawn up and should be reviewed. He mentioned that new regulations surrounding mortgage lending have raised costs to consumers and restricted lending to people with low credit scores needlessly. Interesting comment since JP Morgan pretty much got out of the FHA business years ago.

%d bloggers like this: