Morning Report - the low end of the housing market is outperforming

Vital Statistics:

	Last	Change	Percent
S&P Futures	2073.6	0.4	0.02%
Eurostoxx Index	3766.9	51.6	1.39%
Oil (WTI)	51.55	-0.6	-1.13%
LIBOR	0.274	0.003	1.11%
US Dollar Index (DXY)	97.67	0.888	0.92%
10 Year Govt Bond Yield	1.90%	0.01%
Current Coupon Ginnie Mae TBA	103.1	#N/A N/A
Current Coupon Fannie Mae TBA	102.3	-0.1
BankRate 30 Year Fixed Rate Mortgage	3.75

Markets are flattish this morning on no real news. Bonds and MBS are down small.

The ISM Services index slipped to 56.5 in March, while job openings hit their highest yet at 5.1 million. 

It looks like the big bond rally on the weak jobs report was overdone. That said, there is no denying it was a lousy report, with payrolls coming in at 126k versus 245k expected, and the labor force participation rate falling back to its post-disco lows of 62.7%. About the only bright spot was the increase in wages. Can't blame this jobs report on the weather, although we may be starting to feel the effects of the stronger dollar. 

Tomorrow, we will get the minutes from the FOMC meeting last month. The focus will be on the thinking behind the removal of the word "patient." Given the weakness in the economic data lately, the Fed may choose to make its first move in September. 

We are starting to see the low end of the housing market outperform the high end, according to CoreLogic. Prices rose 5.6% in February and remain about 12% below the peak. House prices at the lower price points increased over 9%, while the high end increased about 5%. CoreLogic says this is the hottest price appreciation prior to the Spring Selling Season in 9 years. They are forecasting another 5% increase in prices this year.