January 17th, 2017
WRAP: Trading was on the light side today to begin the holiday-shortened week, though risk off was the trade of the day. The 3.5% Fannie 30-yr coupon gained 25bp to end the session at 102.78. Stocks closed lower with financials, transports and other big post-election gainers losing ground as earnings season kicks into gear. The Dow lost 58.96 points to 19,826.77, the S&P 500 fell by 6.75 points to 2,267.89, while the Nasdaq closed at 5538.72, -35.38 points. WTI oil closed at $52.48/barrrel, +$0.11. 10-yr T Note yield 2.32%. Tomorrow's data includes CPI for December and the January NAHB Housing market Index. The Fed's Beige Book is due out tomorrow afternoon.
Commentary 9:18 AM 3.5% Fannie Mae 30-yr coupon up 22bp at a price of 102.75. A pretty good start to the day. Currently we are just above the 50 day moving average of $102.71. Tomorrow the Consumer Price Index is coming out at 8:30 am et.
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.
2:32 PM Stocks underwater, while MBS hold gains in quiet trading.
1:00 PM At midday, MBS holding gains, Stocks lower. 10-yr yield 2.34%.
12:47 PM The national average price for a regular gallon of gasoline at $2.33.
12:46 PM Fed Governor Brainard: Fed likely to hike rates faster if fiscal policy quickly eliminates labor market slack; full employment within reach; gradual rate hike path appropriate as long as inflation remains tame but fiscal policy could change that.
11:35 AM Walmart plans to hire 10,000 new workers for soon-to-be-opened stores. GM plans to bring back 7,000 jobs from over overseas.
11:00 AM The 3.5% Fannie Mae 30-yr coupon continues to stall a resistance one (R1) at the 50-day Moving Average (102.71) and is currently trading at 102.69.
10:44 AM Moody's settles with the Department of Justice and agrees to pay $864 million to settle claims for its role in providing shaky credit ratings for Residential Mortgage Backed Securities and Collateralized Debt Obligations.
10:24 AM MBS losing steam as Stocks cut into losses.
10:20 AM Stocks cutting into losses.
9:32 AM Stocks open lower.
9:28 AM Fed's Dudley says "inflation is simply not a problem", which is supporting Bond prices.
9:06 AM The week will see data on CPI, housing, and the Philly Fed.
8:57 AM MBS edging higher.
8:40 AM WTI oil at $53.09/barrel, +$0.73.
8:40 AM Empire Manufacturing for January at 6.5 vs 8.3 expected.
8:37 AM 10-yr T Note yield 2.34% from Friday's close of 2.38%.
8:21 AM U.S. dollar index 100.54, -0.64.
8:19 AM MBS open higher as Stock futures decline on Brexit worries and as the dollar declines after Trump said it was too strong.
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