Commentary at the close: MBS closed narrowly changed vs Treasuries following generally supportive comments from the Fed's Yellen and Fischer regarding a 25bp hike to the fed Funds Rate at the March FOMC meeting. Volatility continued in the Mortgage Bond market today as the Fannie Mae 30-yr 3.5% coupon opened at 101.66, traded to 101.81, then to 101.47 soon after Fed Chair Yellen's speech, only to close at 101.84, unchanged, and right near support of 101.84. See Chart Below Stocks closed near unchanged - Dow at 21,005.71, S&P 2,383.12, while the NASDAQ finished the week at 5,870.75. WTI oil closed at $53.33/barrel, +$0.72. 10-yr yield 2.48%. Next week February Non-farm Payrolls will be released where it is expected that employers added 188K new jobs. Have a great weekend!
What is the 'ISM Non-Manufacturing Index'
ISM Non-manufacturing Index is an index based on surveys of more than 400 non-manufacturing firms' purchasing and supply executives, within 60 sectors across the nation, by the Institute of Supply Management (ISM). The ISM Non-Manufacturing Index tracks economic data, like the ISM Non-Manufacturing Business Activity Index. A composite diffusion index is created based on the data from these surveys, that monitors economic conditions of the nation.
|Friday, March 3, 2017||Report||For||Estimate||Actual||Prior||Impact|
|10:00 AM||ISM Services Index||Feb||56.5||57.6||56.5|
What Is Going On With Interest Rates? #wigowir
Below is the news when it happened and the market’s reaction. For a full view of the day start at the bottom and work your way up. If want to know what just happened start at the top. All Times are Eastern Standard Time. When the price of Mortgage Backed Securities (MBS) goes down rates go up, and when the price goes up rates come down. Remember in the bond market Bad News is Good News and Good News is Bad news.
Chart at the close:
3:12 PM The 3.5% Fannie Mae 30-yr coupon trades back to near support at 101.84.
3:12 PM Fed Chair Yellen also said the employment goal is essentially met and inflation is moving closer to target.
2:42 PM Stocks flat as Fed Chair Yellen signals a rate hike next this month.
1:07 PM Fed Chair Yellen says March rate appropriate if economy evolves as expected. Could see three rates hikes this year. Economy resilient.
1:02 PM Alert To Lock!
12:49 PM Fed's Bullard says economic conditions have not improved enough to justify a March rate increase.
12:48 PM 10-yr yield moves up to 2.51%.
12:47 PM At midday, Stock and Bond prices lower. Yellen speech imminent.
11:49 AM Stocks continue to trade in negative territory, while MBS trade lower.
10:44 AM MBS now near session lows.
10:02 AM The February ISM Service Index 57.6 vs 56.5 expected and up from 56.5 in January.
9:52 AM Due to February being a short month, the February Jobs Report will be released at on Friday, March 10.
9:33 AM The S&P is slightly lower soon after the opening bell on Wall Street.
8:32 AM The ISM Service Index will be released at 10:00 a.m. ET.
8:27 AM WTI oil $52.84/barrel, +$0.23.
8:19 AM Fed Fund Futures are pricing in a near 80% chance of a rate hike this month.
8:18 AM S&P futures lower ahead of Yellen's speech and as investors cash in some chips after the the Dow, S&P and NASDAQ all hit record highs.
8:16 AM U.S. dollar index 101.81, -0.39 as some profit taking sets in after the recent rally, which was spurred on by higher chances of a March rate hike.
8:13 AM A host of Fed members will be speaking today: Chicago Fed President Evans (FOMC voter) (10:15 a.m. ET), Richmond Fed President Lacker (non-FOMC voter, retiring in October) (10:15 a.m. ET), Fed Vice Chair Fischer (FOMC voter) (12:00 p.m. ET), and Fed Chair Yellen (FOMC voter) (1:00 p.m. ET).
8:12 AM 10-yr T Note yield moves higher to 2.50%.
8:08 AM MBS open lower as the Fannie Mae 3.5% 30-yr coupon opens well below support two (S2) of 101.84 trading at 101.66.
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. On October 5th we started posting our rates and leaving them on the site for you to refer back to. This will allow you see where actual rates have been along with the news that caused the fluctuations on the rate sheet. I ask that you forgive my spelling and grammatical mistakes. This is due writing skills that are lacking and the need to communicate quickly. Most of the information posted on this blog along with the charts and indexes are available all during the day to the subscrbers of www.themortgagemarketguide.com The cost of subscription is very reasonable