Philly Fed Business Index April 2017

This morning the Philadelphia Federal Reserve said its gauge on business activity the region fell for a second straight month in April, falling from the more than 30 year higher from the February 2017 Philly Fed Business Index.  I think most people believe that high was not sustainable given current economic conditions however economist were a bit more optimistic than the reading put out in Philly Fed Business Index.

Philly FedPhilly Fed Business Index fell to 22.0 in April from the 32.8 reading in March 2017. The forecast was for 25.0 this month; so the reading came in weaker than expected and well below the March reading. This is the lowest reading since December 2016.  Mortgage rates have improved over the last week; however they seem to be taking a “breather” after a decent rally that started back in March.

Latter today there is a 5 year note auction however auction rarely has an affect on mortgage bonds.  Tomorrow we get the existing home sales numbers before the weekend.

Economic updates from RTRS; including unemployment claims:

RTRS – PHILADELPHIA FED PRICES PAID INDEX APRIL +33.7 VS MARCH +40.7

RTRS – US JOBLESS CLAIMS ROSE TO 244,000 APR 15 WEEK (CONSENSUS 242,000) FROM 234,000 PRIOR WEEK (PREVIOUS 234,000)

RTRS – US CONTINUED CLAIMS FELL TO 1.979 MLN (CON. 2.020 MLN) APR 8 WEEK FROM 2.028 MLN PRIOR WEEK (PREV 2.028 MLN)

Mortgage bonds are continuing yesterdays selling however nothing to significant.  Mortgage rates have had a good 5-7 days so it’s not surprising to see a little selling in the mortgage bond market.