October 27th, 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 Commentary:
Higher global yields pushed MBS prices considerably lower early in the session, but they showed resilience climbing back little-by-little bouncing off the session lows and closing above support at the 200-day Moving Average for the benchmark Bond. The 3% Fannie Mae 30-yr coupon closed below $104 the first layer of support at 102.94, -22bp. The thought of higher interest rates took Stocks from positive levels to close in negative territory. The Dow lost 29.65 points to 18,169.68, the S&P 500 fell by 6.39 points to 2,133.04, while the Nasdaq was down 34.29 to end at 5215.97. WTI oil closed at $49.72/barrel, +$0.54. 10-yr T Note yield 1.84%. Economic data tomorrow includes the first reading on Q3 GDP, Consumer Sentiment and the Employment Cost Index.
2:56 PM MBS have cut more than 1/2 of today's losses.
1:14 PM The $28B 7-yr Note auction garners a "C" rating with average demand.?
12:34 PM The 3% Fannie Mae 30-yr coupon fell below support at the 200-day Moving Average and has now traded above that key technical level.
12:27 PM The S&P 500 is near unchanged levels.
12:26 PM MBS able to bounce off lows. The next hurdle ... the 1:00 p.m. ET results of today's $28B 7-yr Note auction.
10:47 AM Global yields continue to press higher, which is weighing on Stock prices and MBS.
10:35 AM Fresh session lows for MBS.
10:16 AM Dow, S&P and the Nasdaq turn negative.
10:12 AM Freddie Mac reports that the 30-yr fixed conventional mortgage rate ($417K or less) fell to 3.47% this week from 3.52% last week with 0.6 in points and fees.
10:09 AM Pending Home Sales +1.5% in September, above the 0.6% expected, up from -2.5% in August.
10:06 AM The 3% Fannie Mae 30-yr coupon slips below support at the 200-day Moving Average (102.87).
9:45 AM Stocks are giving back the small opening gains.
9:36 AM MBS at session lows.
9:32 AM Stocks open higher.
8:39 AM Weekly Initial Jobless Claims 258K, -3K from last week and inline with expectations.
8:32 AM September Durable Orders -0.1% vs 0.0%. The business spending metric within Durable Orders came in well below expectations.
8:20 AM Fed Fund Futures show a 78.5% probability of a rate hike in December.
8:17 AM The Treasury will sell $28B 7-yr Notes today, results at 1:00 p.m. ET.
8:16 AM Weekly Initial Jobless Claims and Durable orders will be released at 8:30, Pending Home sales at 10.
8:12 AM WTI oil $49.33/barrel, +$0.17.
8:11 AM U.S. dollar index 98.56, -0.05.
8:04 AM The 10-yr T Note yield hits a 4-month high of 1.82%.
7:59 AM S&P futures modestly higher after a bevy of better-than-expected earnings results.