March 13th, 2023 - Market Update
Current position: Carefully floating
Stocks and Mortgage Bonds are both higher to start the day after the Fed and FDIC stepped in to guarantee customer deposits at Silicon Valley Bank and Signature Bank.
Week Ahead
The highlight of the week will be tomorrow's Consumer Price Index inflation report. The market is expecting headline and core inflation to have risen 0.4% in February and for headline inflation to decline from 6.4% to 6% and core inflation to decline from 5.6% to 5.5%. It may be difficult to see meaningful improvement within this report, unless shelter costs start to catch up.
Technical Analysis
Mortgage Bonds have made a move higher, but have given back some of their gains and are now getting rejected at the 50-day Moving Average. They are still up over 80bp this morning, as there is a flight to the safety of the Bond market.
The 10-year has moved back down to 3.50% - It got as low as 3.43%, but after testing the 200-day Moving Average and Fibonacci level, moved a bit higher.
Begin the day carefully floating.
Source: MBS Highway
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