September 1st, 2016
What Is Going On With Interest Rates? #wigowir
When the price of Mortgage Backed Securities (MBS) on the Chart above goes down rates go up, and when the price goes up rates come down. Chart was posted at 10:08 am. All times are Eastern Standard.
Commentary After the close
Not much action for MBS today as traders didn't take on any new positions ahead of the Jobs Report. Today's weaker than expected ISM Index did manage to pull Bond prices off the early session lows. The 3% Fannie Mae 30-yr coupon closed near unchanged at 103.72. Stocks closed near unchanged. The Dow gained 18.42 points to 18,419.30, the S&P closed unchanged at 2,170.86, while the Nasdaq saw a 13.54 gain to end at 5,226.76. WTI oil was last seen at $43.50/barrel, -$1.20. 10-yr T Note yield 1.56%. And that takes us to the big event players have been waiting for ... the 8:30 a.m.m release of the August jobs Report where it is expected that employers added 180K new workers in August. Be sure to tune in at at 8:30 for the numbers and the market's reaction.
10:08 am Tomorrow the Employment Report for August will be released on Friday at 8:30 am ET. Here is what is expected:
Report Estimate Actual Prior
Non-Farm Payrolls 180,000 255,000
Hourly Earnings 0.2% 0.3%
Unemployment rate 4.8% 4.9%
Average work week 34.5 34.5
The Fed will be watching this report, and the results will have an impact on whether they will raise rates in September or leave them the same. The stronger the report the more likely they will increase the rate. Tomorrow we will post the actual numbers when they come out. Currently MBS is down 13 basis points at a price of $103.56 , as you can see on the chart that we are now trading below the 25 and 50 day moving average.
8:12 AM ET New Rates have been posted
30-Year Fixed 3.375% (3.457% APR) No Origination Fee
15-Year Fixed 2.750% (2.892% APR) No Origination Fee
7-1 ARM 30 year 3.000% (3.341% APR) No Origination Fee
For more rates and details click: http://www.johnmarbury.com/page5.html/
Below is the news when it happened and the market’s reaction. All Times are Eastern Standard Time.
Feel free to call (205-266-5669) or email (firstname.lastname@example.org) John for a quote based on the terms of you loan.
4:05 PM - After this morning's weak ISM Manufacturing Index, Fed Fund Futures show a 24% probability of a hike to the Fed Fund Rates at the September 20-21 meeting.
3:48 PM - S&P ending slightly lower after weak manufacturing data, energy shares slip on lower oil prices.
2:40 PM - MBS trade in an extremely tight range ahead of tomorrow morning's 8:30 a.m. release of the August Jobs Report.
12:56 PM - 10-yr T Note yield drops to 1.55% from this morning's 1.61%.
12:55 PM - At midday, MBS flat to slightly higher, S&P slightly lower.
11:51 AM - The August ISM Manufacturing Index falls to 49.4 vs the 52.2 expected. A reading above 50 indicates expansion in the manufacturing sector while a reading below 50 indicates contraction.
11:25 AM - Wal-Mart to cut 7,000 back-office store jobs.
11:25 AM - With the Fed support, MBS at session highs, though near unchanged.
10:44 AM - Freddie Mac reports that the 30-yr fixed conventional mortgage rate ($417K or less) edged higher to 3.46% this week from 3.43% with 0.5 in points and fees.
9:33 AM - The S&P 500 opens near unchanged as investors await tomorrow's jobs data.
8:41 AM - The New York Fed will purchase up to $2.05B in Fannie/Freddie 30-yr 3s and 3.5s beginning at 11:15 a.m. ET.
8:39 AM - U.S. dollar index 96.08, +0.07.
8:34 AM - Outplacement firm Challenger, Gray & Christmas reports job cuts fell 29% from July to August, -22% from August 2015.
Q2 second read on Productivity in line at -0.6%.
Weekly Initial Jobless Claims rise 2K to 263K, 265K expected.
8:18 AM - WTI oil $44.44/barrel, -$0.26.
10-yr T Note yield rises to 1.59%.
August Non-farm Payrolls will be released tomorrow morning at 8:30 a.m. ET where it is expected that employers added 180K workers.
MBS open flat to slightly lower ahead of Weekly Initial Jobless Claims, Q2 Productivity (8:30) and the ISM Index (10).