Hold on $103

October 26th, 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

 

End of the Day

MBS edged lower in today's session, despite the S&P closing in negative territiry, with Bond investors growing nervous over the future of asset programs. Today's 3.1% rise in September New Home Sales, was somewhat offset by lower revisions for August. The 3% 30-yr Fannie Mae coupon closed at 103.16, -12bp, with small changes from the pricing windows. Currently Bond prices are near the end of short-term trading with solid support at $103. As you can see on the chart above that we have bounced off $103 three times in the last 30 days  Stocks closed mixed with Boeing helping to support prices for the Dow, while Apple applied downward pressure to the S&P and Nasdaq. The Dow gained 30.06 points to end at 18,199.33, the S&P 500 fell 3.73 points to 2,139.43, while the Nasdaq was down 33.13 points to end at 5,250.26. WTI oil lost $0.78 to end at $49.18/barrel. 10-yr T Note yield 1.79%. Tomorrow's economic data includes Durable Orders, Pending Home Sales and Weekly Initial Jobless Claims.

4:00 PM Dow closes slightly higher, S&P slightly lower.

2:57 PM A rally in shares of Boeing lifts the Dow, Apple weighs on the S&P and Nasdaq.

1:58 PM MBS trade in an extremely tight range for the past few hours. Stocks fall back into negative territory.

1:09 PM The $34B 5-yr Note auction garners a "B-" rating with good demand.

11:47 AM The S&P slips back into negative territory.

11:05 AM Stocks have now moved into positive territory.

10:36 AM  U.S. lenders are expected to issue more than $1 trillion in mortgages for home purchases in 2017, reports the MBA.

10:30 AM Stocks cut 1/2 of their losses, MBS at session lows.

10:02 AM September New Home Sales rise 3.1% from August to an annual rate of 593K, below the 610K expected. August was revised much lower to 575K from 609K.

9:31 AM Dow opens -80 points.

9:28 AM Stocks poised to open lower as Apple drags.

8:35 AM The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417K) fell to 3.71% from 3.73% last week, with points at 0.37.

8:34 AM The MBAs refinance index -2%, purchase index -7%.

8:32 AM The New York Fed will purchase up to $1.375B in Ginnie Mae 3s and 3.5s between 9:00 and 9:45 a.m. ET. and purchase up to $2.75B in Fannie/Freddie 30-yr 3s and 3.5s beginning at 11:15 a.m. ET.

8:23 AM The MBA reports that its Market Composite Index, a measure of total mortgage application volume, fell 4.1% in the latest week.

8:22 AM September New Home Sales will be released at 10:00 a.m. ET.

8:21 AM The Treasury will sell $34B 5-yr Notes today, results at 1:00 p.m. ET.

8:20 AM U.S. dollar index 98.53, -0.14.

8:18 AM 10-yr T Note yield 1.78% from yesterday's close of 1.75%.

8:14 AM WTI oil -$0.80 at $49.15/barrel and is headed for the 4th day of declines. Iraq said it did not want to join an output-limiting deal with OPEC, while U.S. inventories increased.

8:13 AM S&P futures lower after iPhone maker Apple reported somewhat disappointing quarterly earnings. Lower Stock prices could support Mortgage Bonds later this morning.

8:08 AM There is no clear catalyst for the rise in yields but several Euro nations sold new Bonds along with the $88B the Treasury is offering this week, which could be weighing on prices.

8:04 AM MBS edge lower at the open after sovereign debt around the globe declined, pushing yields slightly higher.

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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