Member Services Desk Weekly Market Update

This MSD Weekly Market Update reflects information for the week ending May 01, 2026.

Economist Views

THIS WEEK'S ECONOMIC CALENDAR HIGHLIGHTS
Date Time	Event	Period	Survey	Prior
5/4/26 10:00	Factory Orders	Mar	-0.10%	0.00%
5/4/26 10:00	Durable Goods Orders	Mar F	--	0.80%
5/5/26 10:00	ISM Services Index	Apr	53.70	54.00
5/5/26 10:00	New Home Sales	Mar	668k	--
5/5/26 10:00	JOLTS Job Openings	Mar	6,700k	6,882k
5/05/2026	Building Permits	Mar F	--	1,372k
5/6/26 7:00	MBA Mortgage Applications	1-May	--	-1.60%
5/7/26 8:30	Initial Jobless Claims	2-May	--	189k
5/7/26 10:00	Construction Spending MoM	Mar	--	-0.30%
5/8/26 8:30	Change in Nonfarm Payrolls	Apr	63k	178k

The extended still-with-no-end-date Mideast ceasefire/blockade continues to provide a steadier backdrop to markets and limited rate changes, although the situation remains tenuous and spurred further increases in oil prices. Data released over the week was mixed, with labor market data portraying some improvement but inflation measures remaining elevated. As expected, the FOMC kept rates on hold and noted that “inflation is elevated” and “developments in the Middle East are contributing to a high level of uncertainty about the economic outlook”. Inflation was categorized as elevated. The outcome had four dissents, the most since 1992. Three voters supported the rates-on-hold posture but were unsupportive of the statement’s perceived ongoing easing bias. The markets treated FOMC outcome as slightly hawkish and pushed yields higher. Data-wise this upcoming week, the Friday employment situation report will likely be the highlight.

Factory Orders: Following a flat reading, orders in March are expected to post a slight M-o-M dip.

ISM Services PMI Report: This purchasing managers report will provide an update on prices paid, orders, employment, and overall service sector activity levels in April. While the headline index is expected to register a slight dip, prices and employment are forecast to rise, but orders to dip from the month prior.

Job Openings & Labor Turnover (JOLTS) Report: This report from the BLS will provide context on labor market conditions in March, with data on job openings, quits, and layoffs. The headline openings figure is forecast to dip by ~200K.

Building Permits: The final tally for March will be released; the preliminary figure from this past week registered a 10.8% M-o-M drop, as higher rates and costs served as a drag on planned activity.

Mortgage Applications: The past week’s headline weekly index posted a 1.6% dip, after last week breaking a string of declines.

ADP Monthly Employment: The reading for April private payrolls, to be released on Wednesday, will aim to beat last month’s 62K. Given that ADP’s 4-week weekly average series has posted recent improvements, perhaps the April tally will be able to do so.

Initial & Continuing Jobless Claims: Initial claims registered a 23K dip to 189K this past week, with a modest decline in the 4-week moving average. Continuing Claims, meanwhile, continued a downward trend. Overall, this dataset continues to portray a relatively stable yet non-dynamic labor market.

Employment Situation Report: The headline nonfarm payrolls tally for April is forecast to register at 63K, with the unemployment rate remaining at 4.3%. See herein for further color.

University of Michigan Consumer Sentiment (Preliminary): The final headline index for April, released last week, posted a record low. The May-preliminary data, to be released on Friday 5/8, is expected to tick lower again.

Federal Reserve Bank Member Appearances:

• 5/04/2026 12:50 NY Fed President Williams delivers keynote remarks at Cynosure Group Symposium.
• 5/07/2026 14:05 Cleveland Fed President Hammack speaks in fireside chat at Ohio CEO Summit event.
• 5/08/2026 19:30 Chicago Fed President Goolsbee speaks at Hoover Monetary Policy Conference.

UPCOMING WEEK'S US TREASURY AUCTIONS
Bills	Offering Amount	Auction Date -- Settle Date
4-Week; 8-Week	$80bn; $75bn	5/7 -- 5/12
13-Week; 26-Week	$89bn; $77bn	5/4 -- 5/7
6-Week	$75bn	5/5 -- 5/7
Notes	Offering Amount	Auction Date -- Settle Date
No scheduled Note offerings.
Bonds	Offering Amount	Auction Date -- Settle Date
No scheduled Bond offerings.

Key Market Trends

Sources: Bureau of Labor Statistics; Bloomberg; FHLBNY. The highlight of next week’s data is likely to be Friday’s jobs report, since this dataset has historically led to some notable market moves. However, reactions to the report have recently been less pronounced and subject to retracement, as the data can be volatile and is highly subject to revisions and influence from potentially one-off events such as strikes, weather, or response rates. In this regard, the data is probably best viewed via a lens of trends and averages. As seen here, the average monthly gain in nonfarm payrolls over the past 14 months has been ~21K. While this trend is lower than prior years, the unemployment rate, also seen here, has remained relatively steady and posted at 4.3% in the March report. Demographic changes, fueled by an aging workforce, retirements, and declining immigration patterns, have contributed to this dynamic. The Fed is likely to focus more on the unemployment rate, as a result, and the decision to keep rates on hold this past week was with the backdrop of this relatively steady and low unemployment rate.

Source: Bloomberg. Here is further context on the employment side of the Fed’s dual mandate which likely contributed to its “on hold” decision. While current labor markets are less than dynamic, they are maintaining a relative stability. Here we can see that the 4-week moving average of initial jobless claims have moved generally sideways in recent months. Meanwhile, continuing claims, after a concerning bounce higher in winter, have trended lower in the past few months. While the move lower in continuing claims would generally be considered a positive development, some of the decline could be due to lapsing benefits (some states cease unemployment benefits after 26 weeks) and/or workers dropping or aging out of the workforce.

Source: Bloomberg. Top pane is yield (LHS, %); bottom pane is change (LHS, bps). As of late Thursday afternoon, the UST term curve was 2 to 7 bps higher in a modest steepening move. In terms of a 3-month range, yields are a bit lower than levels on March 26th but remain well above the levels of February 27th. The market’s takeaway from the FOMC was to pare back the chance of any further policy easing. The market’s end-2026 forward is ~3.625%, ~3.5 bps higher than a week ago and which equates to ~7% chance of one 25-bps rate cut for the rest of 2026. Since last week, a 100% chance of a 25-bps cut has been completely erased after being priced last week for early-2028. In fact, a chance of hikes are now priced into early next year, with the April 2027 forward, at ~3.70% currently pricing a ~25% chance of a 25-bps hike.

Source: Bloomberg. Here we provide a view of tax-season impacts on the markets. Tax receipts, as expected, drove the Treasury General Account (TGA) higher beginning in mid-April. This withdrawal of cash from the financial system is evident in the notable decline of bank reserves in April. Money Market Fund AUM, not shown here, also experienced notable declines. Despite these dynamics, liquidity and rates in financing markets remained relatively stable, especially compared to Q4 2025. This relative stability is portrayed here in the Fed Funds Upper Bound Target to SOFR differential. While this differential did experience a notable narrowing on the 15th when SOFR rose to 3.72%, it quickly retraced the move. Moreover, as of this writing, month-end conditions appeared relatively calm, thereby again reflecting the soothing impacts of recent lower T-bill supply and the Fed’s T-bill purchase program.

 

FHLBNY Advance Rates Observations

Front-End Rates

• As of midday Thursday and relative to last week, short tenors were modestly changed. With month-end and slightly wider funding levels, the Overnight and 1-week tenors were higher by 3 and 2 bps, respectively. Most other tenors were up by a bp. Overall, financing markets remain calmer than those of late-2025, assisted by the moderation in net T-bill supply over the past two months. Fed purchases of T-bills via MBS portfolio principal reinvestments and its Reserve Management Purchases program have also added stability to financing markets and helped to blunt any severe reactions to any net positive UST and T-bill issuance and/or month and quarter-end periods. April’s mid-month tax date, as expected, exerted upward pressure, as SOFR trended higher from 3.57% on April 9th to 3.72% on the 15th. However, it had quickly subsided to 3.63% heading into month-end. Money Market AUM is anticipated to soon stage its usual post-tax date rebuild and thereby help conditions. In a wider context, meanwhile, also supporting liquidity conditions has been large bank balance sheet expansion in expectation of regulatory changes and softer capital requirements.
• The week ahead is benign, in terms of UST and T-bill net settlements, which, when positive, extract cash from the markets and thereby exert upward pressure on short-end rates. Indeed, net issuance will remain slightly negative in the upcoming week.

Term Rates

• The longer-term curve, as of Thursday afternoon and generally mirroring the moves in USTs and swaps, was higher and slightly steeper from a week prior, with tenors 2-year-and-out up by 6 to 7 bps. Please refer to the previous section for color on market dynamics and changes.
• On the UST term supply front, the upcoming week serves a reprieve from auctions. Note that UST auctions usually occur at 1pm and can occasionally spur volatility around that time. Please contact the Member Services Desk for further information on market dynamics, rate levels, or products.