Mortgage Rates and PPI (Wholesale Inflation Tame)

August 10th, 2017

Suggestions that can change during the day: Mortgage Bond prices are just slightly higher, despite lower Stock prices and the ongoing tensions in North Korea. Locking is recommended.

Rates Effective August 10th, 2017 12:30 PM EST

No origination on all posted rates.  Call for other rates. **Rate Assumptions below the news

Conforming loans $424,100 and under

30-Year Fixed Rate 3.875% (3.961%APR)

15-Year Fixed Rate 3.250% (3.397% APR)

After close Commentary: Ongoing tensions between N Korea and the U.S. coupled with profit taking with the major indices at all-time highs, sent a chill threw the equity markets today sending prices plunging. However, there was no lift off for Bond prices. The Fannie Mae 30-yr 3.5% coupon closed at 103.34, +12bp. Not a bullish move for Bond prices. The Dow fell by 204.69 points to 21,844.01, the S&P 500 declined by 35.81 points to 2,438.21, while the NASDAQ was down 135.46 points to end at 6,216.87. WTI oil closed at $48.59/barrel, -$0.97. 10-yr yield closed at 2.20%. Inflation data from the Consumer Price Index will be released tomorrow.

 

Late morning Commentary:  Wholesale inflation in July, as measured by the Producer Price Index (PPI), fell 0.1% versus the 0.2% expected. The Labor Department cited lower costs for energy and service products for the decline in the wholesale inflation. Core PPI, which strips out volatile food and energy, came in at -0.1% versus the 0.2% expected. On a year-over-year basis, PPI fell to 1.9% from 2%. Tomorrow the more closely watched Consumer Price Index will be released for July. Clearly, inflation is not a threat at this time.

The Mortgage Bankers Association (MBA) reported on Thursday that its Builder Application Survey fell 12% in July from June and comes after a 4% decrease in June from May. The survey provides a gauge of new home sales activity in the United States. The MBA also reported an increase in the average loan size for new homes to $329,483 from $527,833. Year over year, applications for new home sales were up 5.1%, though below the 10% annual gain in June and a 20% increase in May.

Mortgage rates continued to edge lower this week as the tensions between North Korea and the U.S. sent investors into the safe haven of the Bond markets and out of risky investments, such as Stocks. Freddie Mac reported that the 30-year fixed mortgage rate fell 3bp this week to 3.90% from 3.93% with 0.5 in points and fees. Last year this time the rate was 3.45%. Low levels of inflation are also helping to keep rates low.

9:00 AM ET  3.5% Fannie Mae 30-yr coupon up 3 bp at a price of 103.28  down 6 bp when rates were set yesterday at 10:00 am et Open 103.34 High 103.34 Low 103.28

Dailey Moving averages we are currently above: 100  $102.81 200  $102.68    25 102.89  and below 50 102.98   Others numbers psychological numbers 103.00 , 103.19, 103.34

Thu, Aug 10 8:37 AM Wholesale inflation tame in July.
Thu, Aug 10 8:34 AM Weekly Initial Jobless Claims +3K to 244K and above the 240K expected.
Thu, Aug 10 8:33 AM Year-over-year PPI 1.9%, Core 1.8%.
Thu, Aug 10 8:31 AM Wholesale inflation in July as measured by the Producer Price Index (PPI) -0.1% vs 0.2% expected. Core PPI -0.1% vs 0.2% expected.
Thu, Aug 10 8:25 AM The Fannie Mae 30-yr 3.5% coupon presses up against resistance two (R2) at 103.34, a level the Bond has only closed above three times since early November.
Thu, Aug 10 8:23 AM New York Fed President Dudley will be speaking 10:00 a.m. ET this morning.
Thu, Aug 10 8:20 AM The Monthly Bond Rollover will take place tonight after the market closes.
Thu, Aug 10 8:18 AM U.S. dollar index 93.57, +0.14.
Thu, Aug 10 8:17 AM WTI oil $49.94/barrel, +$0.38.
Thu, Aug 10 8:15 AM The Producer Price Index and Weekly Initial Jobless Claims will be released at 8:30.
Thu, Aug 10 8:13 AM The Treasury will sell $15B 30-yr Bonds today and comes after yesterday's weak 10-yr offering, results at 1:00 pm.m ET. Yesterday's weak results had a hand in pushing Bond prices lower.
Thu, Aug 10 8:11 AM 10-yr T Note yield 2.23%, near unchanged.
Thu, Aug 10 8:09 AM MBS open modestly higher as the Stock markets are pointing towards a lower open with the tensions in N Korea lingering.
Thu, Aug 10 8:01 AM MBS look to open near unchanged after the gains seen yesterday morning only to lose those gains when the market closed.

**Rate Assumptions  coming soon

 

 

Johnmarbury.com has attempted to verify the information contained on this post.  However any aspect of such may change without notice.  Johnmarbury.com does not provide investment advice and does not represent that any of the information or related analysis is accurate or complete at any time. Forgive my spelling and grammatical mistakes due to writing skills that are lacking and the need to communicate quickly.  

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