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Market Snapshot 4.19.23- Zero US Data Today

Good Wednesday Am (best day of the week),

Zero US data today worth speaking of.

UK inflation came in hot (above 10% yet again) mostly on escalating Food costs. That is spooking markets on what the Bank of England will do and how that impacts other central banks (our Fed). The ten-year note has touched the bottom of the trading channel (3.64%)and as long as the support line holds, we should start to make our way back to the top of the channel (3.40%). Mortgage bonds are working in lock step.

An interesting piece on the emergency lending the Fed/Treasury/FDIC stepped up with last month to shore up the banking sector. The commentary is helpful but the graph below is a bit alarming.

Banks are turning to an obscure government-linked lender to shore up their balance sheets. The Federal Home Loan Bank system—established during the Great Depression to help promote mortgage lending and now a source of liquidity for banks of all stripes—issued a record $495 billion of debt in March to fund loans, which are called advances, the system’s Office of Finance said. Banks ramped up borrowing that month as customers pulled out deposits and investors panicked over failures that threw the stability of the U.S. financial system into question. Critics say that the home-loan banks have gone beyond their mission of supporting housing and that the closures show they sometimes prop up banks that aren’t stable.

That’s all I’ve got today.

Please remain safe and stay healthy, make today great!