7/27/16

July 27th, 2016

Wed, Jul 27 5:00 PM

MBS ended the session higher and tighter despite the post-FOMC Treasury bounce as buyers were waiting to scoop up 3% and 3.5% as the FOMC tilted hawkish but not enough to merit much of a change in the odds of a September rate hike as lower for longer (forever) was a green light for the MBS basis. 

Mortgage Bonds ended higher in a bullish session that saw the Fed hold steady the Fed Funds Rate, with a slight bias to the hawkish side, but not enough to merit much of a change in the probability to a hike in the short term rate. Weaker than expected Pending Home Sales and Durable Orders also helped to support Bond prices. The 3% Fannie Mae 30-yr coupon jumped 34bp to end the session above support at the 25-day Moving Average (103.62) closing at 103.75, the high for the session. Stocks ended near unchanged. The Dow closed at 16,472.17, the S&P 2,166.58, while the Nasdaq closed higher by 29.76 points to 5,139.81. WTI oil closed at $41.96/barrel, -$0.96. The 10-yr T Note yield fell to 1.50%. Tomorrow's economic data is limited to Weekly Initial Jobless Claims. One one hand, the Treasury will sell $28B 7-yr Notes. On the other hand, the Fed will be purchasing up to $2.6B in Fannie Freddie 30-yr 3% coupons beginning at 11:15 a.m. ET.
 
Wed, Jul 27 3:44 PM -With today's higher prices, the 3% 30-yr Fannie Mae coupon rises above support at the 25-day Moving Average.
Wed, Jul 27 2:34 PM -The Dow +25 points, S&P -1.31 points, Nasdaq +27 points.
Wed, Jul 27 2:21 PM - Fresh session highs for MBS.
Wed, Jul 27 2:10 PM - Fed: The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction, and it anticipates doing so until normalization of the level of the Federal Funds Rate is well under way.
Wed, Jul 27 2:06 PM - The S&P was down 5 points before the statement, still -5.
Wed, Jul 27 2:05 PM - MBS dipped briefly right after the statement was released, but are now back at pre-statement levels.
Wed, Jul 27 2:01 PM - Household spending said to growing strongly.
Wed, Jul 27 2:01 PM - Inflation below the 2% objective.
Wed, Jul 27 2:00 PM - No change in interest rates and the fed says rates will rise gradually. Risks to near term outlook has diminished.
Wed, Jul 27 1:16 PM - Freddie Mac's MiMi report, which measures the stability of the housing market, increased 1.05% in May to 84.95, moving further into the range considered to be stable, 80 - 120.
Wed, Jul 27 1:12 PM - Correction: the $28B 7-yr Note auction will take place tomorrow, not today due the the Fed announcement.
Wed, Jul 27 12:58 PM - At midday, MBS higher, S&P lower ahead of the Fed. 10-yr yield edges lower to 1.54%. WTI oil $41.78/barrel as it continues to push lower.
Wed, Jul 27 12:17 PM - The markets await the 1:00 p.m. ET release of today's $28B 7-yr Note and then the 2:00 p.m. ET release of the Fed statement.
Wed, Jul 27 11:15 AM -MBS now at session highs

Chart above was posted at 9:25 am et.  When the price goes up rates come down.  Currently we are moving sideways.

10:53 AM New Rates have been posted http://www.johnmarbury.com/page5.html/  Below is a 30 year quote from the rate page.

30-Year Fixed 3.375%  (3.457% APR) No Origination Fee 

30-Year Fixed-Rate Mortgage: The monthly payment on a $200,000 30-year Fixed-Rate Loan at 3.375% and 70% loan-to-value (LTV) is $884.19 with 0 points due at closing. The Annual ercentage Rate (APR) is 3.457%. Payment does not include taxes and insurance premiums. The actual payment amount will be greater. Some state and county maximum loan amount restrictions may apply.

Wed, Jul 27 9:14 AM- Coca-Cola misses on revenues estimates, beats on earnings per share.

Wed, Jul 27 8:49 AM -The MBA said the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.69% from 3.65%.
Wed, Jul 27 8:46 AM - The MBAs refinance index fell 15%, while the purchase index decreased 3%.
Wed, Jul 27 8:41 AM - The Treasury will sell $28B 7-year Notes today, results at 1:00 p.m. ET and comes after weak performances by the 2 and 5-yr offerings.
Wed, Jul 27 8:30 AM -June Durable Orders -4.0% vs -1.0% expected. May revised lower to -2.8% from -2.2%.
Wed, Jul 27 8:27 AM - The MBAs Market Composite Index, a measure of total mortgage loan application volume, fell 11% in the latest week.
Wed, Jul 27 8:23 AM- Altria's revenue falls as cigarette shipments slip.
Wed, Jul 27 8:21 AM - Durable Orders (8:30) and Pending Home Sales (10), but the numbers should take a backseat to the Fed statement.
Wed, Jul 27 8:18 AM - U.S. dollar index 97.33, +0.16.
Wed, Jul 27 8:17 AM - WTI oil -$0.15 to $42.78/barrel.
Wed, Jul 27 8:16 AM - The 10-yr T Note yield 1.56%.
Wed, Jul 27 8:12 AM - The two-day Fed meeting will end today with the 2:00 p.m. ET release of the monetary policy statement.
Wed, Jul 27 8:12 AM - There is a near zero percent chance of a hike in the short term Fed Funds Rate.
Wed, Jul 27 8:10 AM - MBS open flat to slightly lower. S&P futures modestly higher after strong earnings from iPhone maker Apple.

Contact

John Marbury
jmarbury@nationalbankofcommerce.com
NMLS# 740833
Phone:205-266-5669
Fax: 866-217-4174

813 Shades Creek Parkway
Birmingham, Alabama 35209
 

Mission Statement

As a loan officer (mortgage broker 1989-2006) since 1985, I have seen a lot of changes over the years. The only consistency in the mortgage business and life is change. This is the reason that we believe it is necessary to move quickly and to be early. Let us know if you have any questions or if we can help in any way.

Sign Up Now!