Morning Report: Consumers getting more constructive on the economy

Vital Statistics:

	Last	Change
S&P Futures	2186.5	2.0
Eurostoxx Index	350.5	1.0
Oil (WTI)	46.4	0.9
US dollar index	85.7	-0.1
10 Year Govt Bond Yield	1.54%
Current Coupon Fannie Mae TBA	103.3
Current Coupon Ginnie Mae TBA	104.2
30 Year Fixed Rate Mortgage	3.52

Stocks are higher after the ECB left rates unchanged. Bonds and MBS are flat.

Initial Jobless Claims came in at 259k, We have been below 300k (an important level) for 80 weeks now. 

Consumer comfort increased to 44 last week, according to Bloomberg.

Wage inflation is evident only in certain pockets of the labor economy - tech workers, engineers, construction, and remains flattish in the less skilled sectors. Elsewhere, hours are being cut and we are seeing full-timers being relegated to part-time. Until we start seeing broad-based wage inflation, the Fed is going to move slow. Note there is a disconnect between the Fed heads and what the markets are saying regarding near-term rate hikes. The markets aren't buying the hawkish language. 

Consumers are getting somewhat more constructive on the economy, according to Fannie Mae. The number of people who think the economy is on the right track improved to 38% and the number of people who think the economy is on the wrong track fell to 52%. Given the weak data recently that could be a temporary blip.