FOMC will dominate market news today

Published Date 5/4/2022

Rate markets began the day unchanged from yesterday, as expected with FOMC this afternoon.

ADP April private jobs were less than expected at 247K against estimates of 398K, but March was revised higher, from 455K to 479K, no market reaction.

The U.S. trade deficit widened to a record in March, reflecting a surge in imports. The gap in goods and services trade grew 22.3% to $109.8 billion, Commerce Department data showed, the estimates were -$107.1B. Exports were $241.7B, $12.9B more than February exports. Imports were $351.5 billion, $32.9 billion more than February imports.

Jamie Dimon, JPMorgan Chase, in an interview on Bloomberg TV this morning said the obvious, that the Fed should have moved sooner begin tightening. “We’re a little late,” “The sooner they move the better.” He went on saying the U.S. economy is “very strong,”, although there was a one third chance of the Fed’s actions leading to a soft landing and a one third chance of a mild recession. A bigger risk to the global economy than monetary tightening is the war in Ukraine, Dimon said, noting the crisis could have years to run. He said sanctions against Russia were working as intended although they are only “a tool in the toolkit” and “not definitive. What’s definitive is tanks.”

At 9:30 am ET the DJIA opened +27, NASDAQ -4, S&P +4. 10 yr. 2.98% +3 bps.

At 10 am FNMA 4.5 30 yr. coupon -19 bps from yesterday and -37 bps from 10 am yesterday.

At 10 am April ISM non-manufacturing index expected at 58.9 dropped to 57.1 from 58.3 in March.

The 10 yr. note sitting at 3.00% the level that held yesterday, before ending the day at 2.96%. Waiting now until 2 pm when the FOMC policy statement is released, then Powell’s press conference at 2:30 pm to 3:30 pm. Generally quiet now until the news hits.

Source: TBWS