January 19th, 2017
Commentary at the close: MBS closed lower in price, along with Treasuries, as Wednesday's post-Yellen carnage continued, taking the yield on the 10yr to within a whisker of 2.50%, before a modest rebound as Stocks declined ahead of tomorrow's inauguration. MBS fell once again today as a better-than-expected economic news helped to push prices lower, while yields surged higher. The 3.5% Fannie Mae 30-yr coupon lost 19bp to end at 101.94 and lost 137bp from last Thursday's high of 103.12 to this morning's low of 101.75. We did not maintain the 102 that we were hoping for, hopefully the 101.94 holds some significance for the MBS.
Wrap: Stocks fell ahead of tomorrow's presidential inauguration and despite the positive economic data. The Dow lost 72.32 points to 19,732.40 as it moves below the 20,000 mark. The S&P was down 8.20 points to 2,263.69, while the Nasdaq fell by 15.57 points to end the session at 5,540.08. WTI oil closed at $51.39/barrel +$0.29. 10-yr T Note yield 2.46% from yesterday's low of 2.32%. There are no economic reports being released tomorrow.
Commentary 933 am: After yesterday's loss MBS are continuing their downward path. Check out the securities trading below. Hopefully we can hold onto the round number of $102, and maintain our current rates.
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.
4:02 PM The Dow posts 5-day losing streak, down 72 points for the session.
2:59 PM Ellie Mae says closing rates in December hit highest point for the year.
2:12 PM Stocks extending losses, Dow near -100 points.
12:52 PM At midday, MBS hover near session lows. Stocks underwater. 10-yr yield rises to 2.48% from yesterday's low of 2.32%.
10:29 AM MBS hover near session lows.
10:20 AM Freddie Mac reports that the average 30-yr fixed conventional mortgage rate ($424K or less) fell to 4.09% from 4.12% with 0.5 in points and fees.
10:01 AM U.S. dollar index 101.64, +0.71.
10:01 AM WTI oil $51.63/barrel, +$0.54.
10:00 AM After hitting 2.32% early Wednesday morning, the 10-year T Note yield rises to 2.47%.
9:32 AM S&P opens near unchanged.
9:10 AM S&P futures flat.
9:09 AM The better-than-expected economic data pushes MBS lower.
8:37 AM January Philly Fed 23.6 vs 15.3 expected.
8:36 AM Weekly Initial Jobless Claims 234K vs 252K expected and down 14K from the previous week.
8:35 AM Building Permits 1.210 million annually adjusted vs 1.217 million expected.
8:33 AM December Housing Starts +11.3% from November to an annually adjusted rate of 1.226 million, above the 1.193 million expected.
8:23 AMAfter falling through support one (S1) at 102.44 yesterday, the 3.5% Fannie Mae 30-yr coupon opens below support two (S2) at 102.07, and is now trading at 102.0.
8:19 AM S&P futures modestly lower ahead of tomorrow's inauguration for incoming president Trump.
8:18 AM Housing Starts, Building Permits, Weekly Initial Jobless Claims and the Philly Fed Index will be released at 8:30.
8:16 AM The ECB leaves its benchmark interest rate unchanged.
8:13 AM MBS open lower after yesterday's rout, which was due in part to concerns that the incoming administration could reverse the recent MIP cut on FHA mortgages. Those rumors brought out sellers as the day progressed.
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