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Rates began higher this morning on reaction to the increased tensions in the mid-east. On Saturday Iran launched an attack on Israel, firing hundreds of various missiles but few actually hit targets. According to reports there was little damage in Israel and no casualties. Iran planned its attack for a Saturday when global markets were closed, otherwise there would have been massive movements in markets. At 8 am ET the 10 year note +10 bps, the 2 year note +8 bps; MBS prices began -27 bps from Friday’s close.
Iran now saying there won’t be anymore attacks. Israel saying no retaliation planed so far. Air traffic reopened and the government lifted its directive to head to bomb shelters.
March retail sales at 8:30 am continue to hold strong; month/month +0.7% with estimates at +0.4%, ex vehicles +1.1% with forecasts at +0.5%, ex vehicles and gas expected +0.3% increased 1.0%.
At 9:30 am the DJIA opened +366 after declining 476 last Friday, the first higher open in sixteen days. The 10 year note at 9:30 am 4.62% +10 bps. FNMA 6.0 30 year coupon at 9:30 am -33 bps from Friday and -40 bps from 9:30 am Friday.
At 10 am April NAHB housing market index, expected unchanged from March at 51, reported at 51.
This Week’s Economic Calendar:
Monday, 8:30 am March retail sales (as reported +0.7%)
April Empire State manufacturing index (expected -5.1% declined 14.1%)
10 am February business inventories (forecast +0.4%, as reported +0.4%)
April NAHB housing market index (estimates at 51 unchanged from March, as reported at 51)
Tuesday, 8:30 am March housing starts and permits (starts 1.480 million down from 1.521 million; permits 1.510 million from 1.518 million)
9:15 am March industrial production and capacity utilization (production +0.4%, cap utilization 78.5% from 78.3%)
Wednesday, 7 am weekly MBA mortgage applications
2 pm Fed’s Beige Book
Thursday, 8:30 am weekly jobless claims (215K from 211k)
April Philadelphia Fed business index (0.0 from +3.2)
10 am March existing home sales (year/year 4.180 million from 4.38 million in February)
March Leading Economic Indicators (0.0% from +0.1)
Friday, No data on the schedule
PRICES @ 10:00 AM
10 year note: 4.63% +10 bp
5 year note: 4.67% +10 bp
2 year note: 4.98% +7 bp
30 year bond: 4.72% +9 bp
30 year FNMA 6.0: @9:30 am 99.44 -33 bp (-40 bp from 9:30 am Friday)
30 year FNMA 6.5: @9:30 am 101.14 -25 bp (-30 bp from 9:30 am Friday)
30 year GNMA 5.5: @9:30 am 98.39 -39 bp (-47 bp from 9:30 am Friday)
Dollar/Yuan: $7,3745 +$0.0017
Dollar/Yen: 154.35 +1.07 yen
Dollar/Euro: $1.0641 unch
Dollar Index: 106.03 -0.01
Gold: $2,362.40 -$10.40
Bitcoin: 66,405 +2204
Crude Oil: $84.77 -$0.89
DJIA: 38,314 +330
NASDAQ: 16,272 +96
S&P 500: 5164 +40
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