8/04/16 Buckle Up!

August 4th, 2016

What is Going on with Interest Rates? #wigowir

 

10:34 AM ET New Rates have been posted

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.

 

For more rates and details click: http://www.johnmarbury.com/page5.html/


Mortgage Backed Securities (MBS) put in an impressive session as the pre-open policy decisions from the Bank of England set off a rally in fixed income, and MBS participated as the global reach for yields ensued. Buckle up for tomorrow's the Jobs Report for July. This can be the most volatile day of the month.  Remember Volatile can be good or bad, and the market does not like surprises. Most of the time in the bond market Good News is Bad News. 
MBS held onto gains in today's session but traded in an extremely tight range. The chart above was posted at the end of the day.  The Fannie Mae 30-yr 3% coupon gained 22bp to end the session at 103.97 and closed above support at the 25-day Moving Average (GREEN LINE).   You can see that we have been bumping along the 25 day moving average, since July 15th.  During the day prices moved over $104 only to retreat just below this psychological number. Traders are more likely to sale and buy at round numbers.

Stocks closed near unchanged. The Dow finished at 18,352.05, the S&P 2,164.25, while the Nasdaq ended at 5,166.24. WTI oil closed at $41.88/barrel, +$1.05. 10-yr T Note yield 1.50%. As always, be sure to tune in tomorrow.  We will get the numbers and market reaction from the July Jobs Report, which includes Non-farm Payrolls, the Unemployment Rate and Average Hourly Earnings.

Below is the news when it happened and market reaction. All times are Eastern Standard Time

 

3:25 PM - The Treasury and Mortgage Backed Security market traded higher today as sovereign borrowing costs around the world declined following the Bank of England's unexpected decision to administer larger than expected monetary easing to the U.K.'s economy.

 2:13 PM - It is expected that U.S. employers added 185K new workers in July. Non-farm Payrolls set to be released tomorrow morning at 8:30 a.m. ET.

12:59 PM - At midday, MBS holding gains, Stocks flat. WTI oil $41.93/barrel, +$1.10. 10-yr yield 1.49%.

12:16 PM - MBS are holding gains but trade in a tight range for the past two hours.

10:25 AM - Outplacement firm Challenger, Gray & Christmas reports employers in the U.S. planned to cut 45,346 workers in July, up 19% from June. Though it was the 2nd straight monthly increase, layoffs were 57% lower than July 2015.

10:23 AM - Dow, S&P and the Nasdaq fall into negative territory.

10:06 AM - Freddie Mac reports that the 30-yr fixed rate conventional mortgage fell to 3.43% with 0.5 in points and fees.

 9:39 AM - Mortgage Bond prices hit session highs.

 9:32 AM - S&P near unchanged at the open.

 9:10 AM - Freddie Mac reported 2nd quarter earnings this week and said that 42% of non-refinance purchase buys were to fund loans to first-time homebuyers, which is the highest level in 10 years.

 8:36 AM - The 3% Fannie Mae 30-yr coupon rises above support at the 25-day Moving Average (103.77).

 8:31 AM - No big surprises in Weekly Initial Jobless Claims rising 3K to 269K vs the 264K expected.

 8:27 AM - The New York Fed will be purchasing up to $2.65B in Fannie/Freddie 30-y 3s and 3.5s beginning at 9:00 a.m. ET.

 8:17 AM - Weekly Initial Jobless Claims will be released at 8:30.

 8:13 AM - U.S. dollar index 95.69, +0.16.

8:12 AM - The 10-yr T Note yield edges lower to 1.54%.

 8:12 AM - WTI oil flat at $40.84/barrel.

 8:10 AM - As expected, MBS open flat to modestly higher.

 8:05 AM - S&P futures are also higher on the Bank of England news.

 8:03 AM- MBS look to open flat to modestly higher after the Bank of England cut its benchmark interest rate by 25bp to a record low 0.25% and expanded its QE program.

 

 

 

Contact

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

813 Shades Creek Parkway
Birmingham, Alabama 35209
 

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