November 18th, 2016
Comentary: The dam at 103.0 broke and sent Mortgage Bonds to their lowest levels in a year. A look at the chart below shows the Bond is now just above yet another floor of support at $102.75. You can see this in a 1 year view on the Bond chart page. If 102.75 “gives” or is broken to the downside, prices will drop another leg lower quickly ... much like it did today.
WRAP: Mortgage Bond prices fell another leg lower today as the dollar pushed higher and inflation talk continued to fuel downward pressure in Bond prices while yields pushed higher. There were no economic reports released today. The Fannie Mae 30-yr 3.5% coupon lost 41bp to end at 102.78, just above support 2 (S2) at 102.75. Stocks fell as investors looked to book some profits with the Dow near all-time highs. The S&P 500 fell 5.22 points to 2,181.90, the Dow fell by 35.89 points to 18,867.93, while the Nasdaq closed at 5,321.51, -12.46 points. WTI oil closed at $45.69/barrel, +$0.27. 10-yr yield 2.33%. Next week's econonimc data is crammed into three days due the the holiday. The Treasury will sell a total of $88B in T Notes next week ... $26B 2s on Monday, $34B in 5s on Tuesday and $28B 7s on Wednesday. The U.S. markets will be closed on Thursday for Thanksgiving. On Friday, the Bond markets will close early at 2:00 p.m. ET, Stocks closed at 1:00 p.m. ET. Have a great weekend!
The lady will not quit (Yellen) http://finance.yahoo.com/news/yellen-im-not-stepping-down-154017841.html
if the above link does not come up try copying and pasting in your browser.
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. On the chart below you will notice some additional items that need to be explained, they are as follows:
3:16 PM MBS holding near the session lows as the volatile week comes to a close. Stocks lower.
12:55 PM At midday, Stocks and MBS both lower. 10-yr yield 2.34%.
12:08 PM The benchmark 3.5% Fannie Mae 30-yr coupon bounces off support 2 (S2) at 102.75 and trades to support at 103.0 (S1), an encouraging sign.
11:19 AM The 3.5% Fannie Mae 30-yr coupon fell below support 1 (S1) at 103.0 and now is resting on support 2 (S2) at 102.75.
10:59 AM Stocks fall into negative territory. WTI oil -$0.52 at $44.89. 10-yr yield 2.32%.
10:55 AM Next week, the U.S. markets will be closed on Thursday for Thanksgiving. On Friday, the Bond markets will close early at 2:00 p.m. ET, Stocks close at 1:00 p.m. ET.
10:41 AM Alert To Lock
10:39 AM Be on guard, MBS sitting at important support.
9:31 AM S&P opens near unchanged.
8:41 AM WTI oil $45.44/barrel, near unchanged.
8:31 AM S&P futures near unchanged, Dow near record high.
8:22 AM U.S. dollar index 101.04, +0.11 feeling that a rate hike will take place in December.
8:17 AM 10-yr T Note yield 2.28%.
8:16 AM There are no economic reports due for release today.
8:13 AM MBS open flat to slightly higher after yesterday's decline, which was spurred on by Fed Chair Yellen saying that larger government spending, similar to President-elect Trump's proposals, could stoke inflation and raise the national debt.
Johnmarbury.com has attempted to verify the information contained on this post. However any aspect of such may change without notice. Johnmarbury.com does not provide investment advice and does not represent that any of the information or related analysis is accurate or complete at any time.