CPI (Consumer Price Index)

October 18th, 2016

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

 

MBS were able to rise today on the heels of big Fed buying and as investors scooped up some lower prices after the recent decline. Inflation edged higher, though still on the tame side with the Core CPI falling short of expectations. The 3% Fannie Mae 30-yr coupon gained 22bp to end at 103.31. Stocks rose on rising oil prices and strong earnings reports, though they did end off their best levels. The Dow gained 75.54 points to 18,161.94, the S&P 500 was up 13.10 points to 2,139.60, while the tech heavy Nasdaq rose 44.01 points to end the session at 5,243.83. WTI oil closed at $50.29/barrel, +$0.35. 10-yr T Note yield edged lower to 1.74% from yesterday's high of 1.81%. Tomorrow, Housing Starts and Building Permits will be released at 8:30 am. The Fed's Beige Book comes out at 2:00 p.m.

                                   For              Estimate

Housing Starts              Sep             1168K

Building Permits            Sep              1164K

What are 'Housing Starts?'

Housing starts are the number of new residential construction projects that have begun during any particular month. The New Residential Construction Report, commonly referred to as "housing starts," is considered to be a critical indicator of economic strength. Housing start statistics are released on or around the 17th of each month by the U.S. Commerce Department. The report includes building permits, housing starts and housing completions data. Surveys of homebuilders nationwide are used to compile the data.

What are 'Building Permits?'

The monthly building permit report is closely watched by economists and investors alike. Since all related factors associated with the construction of a building are important economic activities (for example, financing and employment), the building permit report can give a major hint as to the state of the economy in the near future.

2:53 PM - 10-yr T Note yield 1.74% from yesterday's high of 1.81%.

2:46 PM - Despite the Stock rally, MBS showing resilience and trade higher today, presently at session highs.

1:03 PM - At midday, MBS holding slim gains, Stocks higher. 10-yr yield 1.75%. WTI oil $50.05/barrel, +$0.11.

11:14 AM - The Atlanta Federal Reserve Bank forecasts a 1.9% increase in Gross Domestic Product (GDP) for the third quarter of 2016, down from 2.1% on October 7. The first reading on third quarter GDP will be released on Friday, October 28 at 8:30 a.m. ET.

10:47 AM - The benchmark 3% Fannie Mae 30-yr coupon at session highs ahead of big buying from the New York Fed where it is expected that purchases will be up to $2.75B in Fannie/Freddie 30-yr 3s and 3.5s beginning at 11:15 a.m. ET.

10:02 AM - The October NAHB Housing Market Index fell two points from October to 63, though above the 59 expected.

9:52 AM - Stocks giving up some gains.

9:44 AM - Dow +100 points.

9:31 AM - Stocks open higher on strong earnings and rising oil prices.

                                                                For      Expectation     Actual

            Consumer Price Index (CPI)        Sep      0.3%                0.3%             

            Core Consumer Price Index         Sep      0.2%                0.1%

          Housing Market Index                     Oct       59.0                 59.0

8:41 AM - Higher costs for housing and gas fueled CPI in September.

8:35 AM  - Year-over-year CPI 1.5%, up from 1.1% in August, Core 2.2%, down from 2.3%.

8:32 AM - September CPI +0.3%, inline. Core CPI 0.1% vs 0.2%.

8:26 AM - WTI oil $50.22/barrel, +$0.26.

8:26 AM - U.S. dollar index 97.77, -0.10.

8:25 AM - 10-yr T Note yield 1.77%.

8:13 AM - The September Consumer Price Index will be released at 8:30, NAHB Housing Market Index at 10.

8:10 AM - The New York Fed will be supportive later this morning purchasing up to $2.75B in Fannie/Freddie 30-yr 3s and 3.5s.

8:08 AM - MBS open near unchanged as S&P futures push higher on rosy earnings reports from Goldman Sachs, J&J and Netflix.

 

 

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