November 2nd, 2016
What is the 'ADP National Employment Report?'
A report that measures levels of non-farm private employment. The ADP National Employment Report is based on payroll data from over half of ADP's U.S. business clients. The data represents about 24 million employees from all 19 of the major North American Industrial Classification (NAICS) private industrial sectors.
|Date & Time of Report||Report||For||Estimate||Actual||Prior||Impact|
|11/3/16 8:30 AM||Jobless Claims||29-Oct||256k||258k||Moderate|
|11/3/16 10:00 AM||ISM Services index||Oct||55.8||57.1||Moderate|
What Is Going On With Interest Rates? #wigowir
MBS closed modestly changed in price and modestly wider on spread following the Fed statement. The first of three hurdles was successfully jumped today with no change in the Fed Funds Rate and no glaring text in the statement. On the chart above you can see the 3% Fannie Mae 30-yr coupon having closed above Support level 2 (S2) at the 200-day Moving Average (102.91) and closed at Support level 1 (S1) at 103
Not much action in the Mortgage Bond markets today as the Fed statement didn't set off any fireworks. The Fed left the benchmark Fed Funds Rate at the 0.25% to 0.50% range and somewhat hinting towards a December hike. The ADP Private Payrolls report saw weaker than expected job growth, 147K vs 165K expected, while September was revised higher to 202K from 154K. The 3% Fannie Mae 30-yr coupon rose by 6bp to end the session at 103.0. The S&P fell for a 7th straight session, its longest such streak in five years, as the Fed signaled there could be a rate hike next month and on the uncertainty surrounding Tuesday's presidential election. The Dow fell 77.46 points to 17,959.64, the S&P fell by 13.78 points to 2,097.94, while the Nasdaq lost 48.01 points to end at 5,105.56. WTI oil closed at $45.34/barrel, -$1.33. The 10-yr T Note yield fell to 1.79%. Tomorrow's data includes Weekly Initial Jobless Claims, Productivity and ISM Services.
3:11 PM Fed Fund Futures edge a bit lower ... now a 72% chance of a hike next month.
3:08 PM There is a 78% probability of a hike to the short-term Fed Funds Rate at the December FOMC meeting.
2:11 PM MBS jump the first hurdle with ease from the Fed. Next up, the October Jobs Report on Friday morning.
2:09 PM Not much reaction in the Bond markets, Stocks selling off, for now after the Fed statement.
2:04 PM Fed: labor markets continue to strengthen.
2:04 PM Fed wants further evidence before moving on rates. Inflation has risen somewhat this year.
2:02 PM There were two dissenters in favor a rate hike, Fed's George and Mester.
2:00 PM Fed leaves rates unchanged.
2:00 PM Fed sends signals about a possible December hike. Case for rate increase continues to strengthen.
1:55 PM The first of three big potential market moving events at 2:00 pm ET with the Fed announcement, then Friday's Jobs Report for October and Tuesday's presidential election.
1:04 PM At midday, MBS flat to higher. Stocks lower. WTI oil $45.23/barrel, -$1.45. 10-yr T Note yield 1.79%.
12:37 PM Traders and investors brace themselves for the 2:00 p.m. ET release of Fed's monetary policy statement.
12:19 PM S&P declines on election jitters, weak oil prices.
10:57 AM MBS trade in a tight range as investors and traders await the 2:00 p.m. ET release of the Fed's monetary policy statement.
10:49 AM Oil prices push lower as U.S. crude stockpiles show the largest jump on record. WTI oil -$1.40 to $45.29/barrel.
10:07 AM The MBAs refinance index -2%, purchase index -0.4%.
9:48 AM Stocks cutting into opening losses.
9:31 AM As expected, Stocks open lower. Dow -51 points.
8:27 AM The 3% Fannie Mae 30-yr coupon fell below support at the 200-day Moving Average (S2) yesterday and closed above that level. This morning, the Bond is resting just above support at 103.0 (S1).
8:24 AM The MBAs Market Composite Index, a measure of total mortgage application volume, fell 1.2% in the latest week.
8:21 AM WTI oil $46.05/barrel, -$0.61.
8:21 AM U.S. dollar index 97.32, -0.37.
8:19 AM The 10-yr T Note yield falls to 1.79% from yesterday's high of 1.88%.
8:16 AM ADP revised September to 202K from 154K on some sort of model change for ADP.
8:15 AM ADP Private Payrolls for October +147K vs the +165K expected.
8:13 AM MBS open flat to slightly higher as S&P futures edge lower on growing uncertainty surrounding the election and ahead of the 2:00 p.m. ET release of the Fed's monetary policy statement.