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.
Commentary at the close
Mortgage Bond prices 122 basis points off the high seen on September 27 for the 3% Fannie Mae 30-yr coupon. The good news is we held on to the Round Number of $103 on the 3% MBS. Bad News the 10-year Treasury closed at a yield of 1.79% the higest close since June 2nd and above the Round Number of 1.75%.
4:03 PM - Fed Chair Yellen did say that the Fed might want to let inflation run a little hotter for a while and to run a "high pressure economy." She hinted that the US economy may still be falling short. The aftermath of the 2007-2009 crisis has "revealed limits in economists' understanding of the economy," the Fed chair suggested. Tumbling home prices reduced consumers' willingness to spend more than economists had envisioned. And a steady decline in the unemployment rate has failed to lift wages and inflation as much as economic models would indicate.
3:56 PM - Fed's Dudley says he would expect this year for next rate hike.
3:00 PM - After the New York Fed purchased a boatload of MBS this morning, buying has dried up.
2:44 PM - MBS move to session lows
2:15 PM - Fed Chair Yellen says nothing to cause a bump in volatility at her speech in Boston.
12:55 PM - At midday, MBS flat to lower. Stocks higher, off best levels. 10-yr yield 1.75%. WTI oil $50.11/barrel, -$0.32.
12:18 PM - The S&P falls to unchanged as the bullish sentiment fades
The current yield on a 10 year Treasury is 1.7640%. A break above round numbers like 1.75% could indicate rates may be moving up. If we end the day below 1.75% then that could be a signal that rates could go lower. Stay tuned for more information.
10:18 AM - Preliminary October Consumer Sentiment declines to 87.9 from the final September reading of 91.2 and below the 92.4 expected.http://www.economiccalendar.com/2016/10/14/october-reutersmichigan-consumer-sentiment-index-declines-to-worst-level-in-over-a-year/
9:32 AM - Stocks open higher on solid bank earnings, Dow + 138 points.
8:47 AM - September Retail Sales x-autos 0.5%, inline.
8:41 AM - MBS slowly cutting into opening losses, now near unchanged.
8:34 AM - Not much reaction in the Mortgage Bond markets after the economic data was released.
8:33 AM - Wholesale inflation, Producer Price Index, slightly hotter at 0.3% vs the 0.2% expected.
8:32 AM - September Retail Sales +0.6%, inline.
8:25 AM - WTI oil at $50.68/barrel, +$0.22.
8:25 AM - Consumer Sentiment will be released at 10:00.
8:24 AM - Treasury prices lower ... 10-yr T Note yield rises to 1.77%.
8:23 AM - Fed Chair Yellen will be speaking in Boston at 12:30 p.m. ET this afternoon
8:22 AM - JPMorgan CFO Marianne Lake says her bank has cross-selling issues as well.
8:20 AM - Fed's Rosengren (voter) signals a Fed Funds Rate hike in December seems appropriate
8:19 AM - Wells Fargo beats on both earnings and revenues is its earnings report.
8:17 AM - JPMorgan Chase, Citigroup tops profit and revenue forecasts in their quarterly earnings reports.
8:15 AM - Retail Sales will also be reported at 8:30.
8:13 AM - U.S. Treasury and Mortgage Backed Security prices decline on the higher inflation data out if China. The U.S. Producer Price Index (wholesale inflation) will be released at 8:30.
8:09 AM - China reports higher than expected inflation for its Producer Price and Consumer Price Index