May 6, 2020 - Market Update

Origination flows were on the higher side again with dealers reporting a range of ~$6.0-$8.0B.  The Fed purchase schedule today includes a maximum of $2.2B GNMA and then later a maximum of $3.960B FN30 year securities.  Prepayment speeds will be released late this afternoon.  

The MBA Mortgage Application Index released this morning, rose 0.1%, after falling 3.3% last week.  Refinance applications fell -1.7% with the average 30yr fixed rate down to a record low of 3.40%.  Purchase applications were up +5.8%.

Treasuries closed lower for the day.  At the close, the 2-year was -0.375/32nds (.190) and the 10-year was -10.5/32nds (.663).

U.S. equities were able to close higher on the hopes that lockdown restrictions would be easing.  Some of the gains were erased late in the session following comments from Fed Vice Chairman Clarida that the economy will possibly need more government support.  The DJIA closed +133.33 to 23,883.09, while the S&P 500 was +25.70 to 2,868.44.   

Market Levels (May):