The Beige Book

October 19th, 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. Remember in the bond market Bad News is Good News and Good News is Bad news.

 

12:40 PM -San Francisco Fed President John Williams spoke this morning but did not comment on monetary policy.

 

11:41 AM - MBS rise to session highs.

 

10:59 AM - The Dow and S&P now firmly into positive territory.

 

10:15 AM - The S&P edges into positive territory.

 

9:43 AM - The S&P trades near unchanged soon after the open.

 

9:00 AM - The final presidential debate will air at 9:00 p.m.ET tonight.

 

8:51 AM - September Housing Starts fell to their lowest level in 1 1/2 years, but single-family construction jumped to its strongest level since February.

housing Starts Sept 2016

 

 

8:36 AM - September Building Permits +6.3% from August to an annual rate of 1.225 million vs the 1.164 million expected.

 

8:32 AM - September Housing Starts -9% from August to an annual rate of 1.047 million units, below the 1.168 million expected.

 

                                          For      Estimate   Actual    Possible impact

10/19  Housing Starts      Sep      1168K       1047K   Moderate

           Building Permits Sep     1164K    1225K     Moderate  

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.

What is the ‘Beige Book?'

A commonly used name for the Fed report called the Summary of Commentary on Current Economic Conditions by Federal Reserve District. It is published just before the FOMC meeting on interest rates and is used to inform the members on changes in the economy since the last meeting.

 

8:14 AM - Fed speak today - San Francisco Fed President Williams (non-voter) at 8:45 a.m. ET and Dallas Fed President Kaplan (non-voter) at 1:30 p.m. ET.

8:13 AM - The Fed's Beige Book will be released at 2:00 p.m. ET.

8:12 AM - September Housing Starts and Building Permits will be released at 8:30.

8:09 AM - MBS open flat to modestly lower.

7:56 AM - WTI oil $51.10/barrel, +$0.81.

7:55 AM - The Ginnie Mae 30-yr 3% and 3.5% had their Monthly Rollover after the close of trading last night, effect -19bp and -9bp, respectively

7:52 AM - MBS look to open near unchanged.

7:52 AM - 10-yr T Note yield 1.75%.

7:48 AM - The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417K or less) increased to its highest level since June, to 3.73%, from 3.68%, with points increasing to 0.36 from 0.35 (including the origination fee) for 80% loan-to-value ratio loans.

 

Contact

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

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Birmingham, Alabama 35209
 

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