Mortgage-backed securities (MBS) started with a slight increase of 2 bps, while stocks rose by 7 points. The bond market didn’t follow the 3-5bp rally in European bonds and remained mostly flat in the overnight session. The NYSE opening brought out a few sellers, which was expected due to bond-related ETFs and other tradeflow considerations surrounding any major marketplace opening/closing. Consumers are showing a slowdown in spending due to the Fed’s drastic tightening cycle gaining traction on the economy. Housing starts rose by 2.2% MOM, while building permits fell 1.5% MOM and 21% YOY. The chances of a Fed rate hike pause in June are down to 75%, and there’s speculation of rates at 5 or even 5.25 in July. The stakes are high enough that it doesn’t make much sense to stray too far from wherever it is we’ve been in the bond market. MBS ended basically flat at +2 bps, while stocks won the day at +48.