Stocks are mixed and Mortgage Bonds are lower to start the day.
Empire State Manufacturing Index
The Empire State Manufacturing Index for March was reported at -20.9, which was far worse than forecasts of -7 and the prior reading of -2.4. Demand continued to soften with New Orders declining -17.2 vs -6.3 last month. On the labor front Employment came in at -7.1 from -0.2 and hours worked -10.4 from-4.7.
Fed Decision and SEP
Next Wednesday the Fed will be releasing their rate decision and updated Statement of Economic Projections. The last update we received was in December, where FOMC members projected a median of three rate cuts for 2024. It will be important to see whether recent inflation and employment data has impacted these projections. In addition to the dot plots, we will be receiving updated unemployment rate projections. With a difficult road ahead to reach the Fed's stated goal of 2% inflation, our most likely path toward aggressive rate cuts is through a higher rate of unemployment.
Next Week
Monday: NAHB Housing Market Index
Tuesday: Housing Starts, 20-Year Bond Auction
Wednesday: Mortgage Applications, FOMC SEP
Thursday: Jobless Claims
Technical Analysis
Mortgage Bonds have broken convincingly beneath their 25-day Moving Average and are now trading just above the next level of support at the 100.427 Fibonacci Level.
The 10-year has moved higher and is trading in a new range with support at its 100-day Moving Average and a ceiling at 4.35%. After Locking yesterday we can begin the day Floating.
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