December 29th, 2016
Commentary at the close: Mortgage Bonds enjoyed another nice day, thanks to continued weakness in Stocks and lower yields abroad. In regards to the latter, the German 10-Year Bund is at its lowest yield since before the Presidential election. If these yields continue to decline, our yields may continue to drop in sympathy. Technically, prices are off the Down Escalator – which is a good thing. The only bad thing, is that this positive move is happening on razor thin trading volume and lack of fresh money entering the financial markets. Come next week, when traders return and fresh pension fund money hits the markets, we will find out if this move in Bonds is for real or if this was simply a holiday week bounce.
Wrap: The FNMA 30-year 3.5% coupon was able to eke past the second level of resistance today, gaining 32 bps to close at 102.16. Stocks saw small declines, with the Dow dropping 11.11 bps to close at 19821.97. The NASDAQ was down 6.47 bps, closing at 5432.09, and the S&P lost 1.03 bps to end the day at 2248.89. WTI oil ended at 53.74 a barrel. The 10-yr T Note yield was 2.51% at the end of session. Chicago PMI is scheduled for release tomorrow. The Bond market closes early at 2:00 p.m. ET. Stocks are open for a normal session. All markets are closed Monday, January 2, 2017 in observance of New Year’s.
Commentary 1:36 pm As you can see on the chart below we are now above the resistence of R1 and R2. For the moment the stock market is in a holding pattern just below 20,000. Bonds prices are currently trading at 2 week highs.
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.
3:39 PM U.S. announces sanctions against Russian officials for hacking.
Chart below posted at 1:36 pm
12:06 PM At midday, Bond still pushing against 2nd-level of resistance and the 25-day moving average.
11:56 AM USD LIBOR 1-month .77%, 3-month .99%, 6-month 1.31%, 12-month 1.69%.
10:46 AM 10-yr German Bund yield .17%
9:50 AM U.S. dollar index 102.96 -0.27.
9:13 AM 10-yr T Note yield down to 2.49% from yesterday's close of 2.51%.
8:42 AM WTI oil at $53.86/barrel down 20 cents.
8:33 AM Initial Jobless Claims down 10K to 265K.
8:13 AM S&P futures open slightly higher
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