Mel's Blog

Mortgage Bonds are trading higher, but well off of their best levels of the day.  And it is truly amazing to see how this morning's advance was stopped dead exactly at the 200-day Moving Average.  Prices are already close to a re-price for the worse range at the early windows on the Bond Page.  Let's keep a close eye on this and be mindful that swings are likely, which make calling this market very challenging.  Additionally, check the time when your lender posts their price, as the variance from windows can be significant.   

The Commerce Department said that the Core PCE price index, which is the Federal Reserve's preferred measure of inflation, rose by 0.1% as expected in April, slowing from a 0.2% increase in March.  On a year-over-year basis Core PCE rose 2.1%, just a hair above the Fed's comfort zone of 2%.  Remember that the Core level removes the more volatile food and energy components.  Headline inflation on a year-over-year basis was reported at 3.2%. 

The Chicago Purchasing Managers Index was reported at 49.3, slightly better than expectations of 48.5.  The University of Michigan Sentiment was reported at 59.8 and inline with expectations.