April 7, 2022 Headlines

Treasury yields are higher and the curve steeper for a second consecutive day as the market reacts to more hawkish words from Fed leaders. Fed Governor Lael Brainard, considered one of the more dovish leaders at the central bank, spoke yesterday for the first time since February 18 and opened by quoting Paul Volker, the former Fed chair who famously fought high inflation in the 1980s with ultra-aggressive rate hikes. Brainard acknowledged that “inflation is much too high” and that the Fed plans to shrink its balance sheet “rapidly” as soon as the May meeting. The balance sheet comment has weighed on long-end rates, which was likely the intent with all the recent focus on curve inversion. The S&P 500 fell 1.3% yesterday, and futures are down another 94 bps an hour before the open.

The MBA mortgage applications index fell 6.3% last week, the fourth consecutive weekly decline and once again driven largely by a decline in refinance applications. The refi index fell 8.9% for the weekend ended April 1 and is now down 39.2% since March 11. The average 30-year conventional contract rate rose 10 bps to 4.9% according to the MBA survey and is up 81 bps since March 4 (+157 bps YTD).

Jason Haley
Chief Investment Officer

04/04/22Factory Orders-0.60%-0.50%1.40%1.50%
04/04/22Factory Orders Ex Trans0.30%0.40%1.00%1.20%
04/04/22Durable Goods Orders-2.20%-2.10%-2.20%
04/04/22Durables Ex Transportation-0.60%-0.60%-0.60%
04/04/22Cap Goods Orders Nondef Ex Air-0.20%-0.30%
04/04/22Cap Goods Ship Nondef Ex Air0.30%0.50%
04/05/22Trade Balance-$88.5b-$89.2b-$89.7b-$89.2b
04/05/22S&P Global US Services PMI58.95858.9
04/05/22S&P Global US Composite PMI58.557.758.5
04/05/22ISM Services Index58.558.356.5
04/06/22MBA Mortgage Applications-6.30%-6.80%
04/06/22FOMC Meeting Minutes
04/07/22Revisions: Jobless Claims
04/07/22Initial Jobless Claims200k166k202k171k
04/07/22Continuing Claims1302k1523k1307k1506k
04/07/22Consumer Credit$18.100b$6.838b
04/08/22Bloomberg April United States Economic Survey
04/08/22Wholesale Inventories MoM2.10%2.10%
04/08/22Wholesale Trade Sales MoM0.80%4.00%


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